Friday, June 20, 2008US Government wants to control water, but is it theirs to begin with?I keep saying that soon clean drinkable water will soon be one of the most sought after commodities competing with oil in value. There are companies all over the world already selling water, both in bottles and for water piped into your home. Now the US Government is working on the Water Restoration Act of 2007. This would give the US Federal Government control over all water in the US. The idea is that this would give the US Government control over water so that it can be protected. It seems water may be a potential terrorist target and they also want to be able to have control over the pollution and said clean up of polluted water to insure the US has safe water to drink.

The problem is that it also opens the door to privatization of the water supply. If there is money to make someone will and controlling water is a sure way to make some. I don’t think that it would be a good idea to give control over our water to someone looking to sell it back to us. It is one thing to pay for water usage in our homes to cover the cost of piping, pumps, maintains and cleaning the water. It is another thing completely to have to pay for the actual water. Right now I can buy a bottle of water if I want to, which is fine because I am not forced to buy the water I can choose to. I already know that it is going to be the poor that suffers if suddenly you have to buy water.

Once you have control over the water you have control over the people. We cannot live with out it. I do agree that pollution must be reduced or stopped and cleaned up. There is less and less clean water everyday. It is a valuable commodity that is used in just about everything from drinking water, production and manufacturing. Do I want the same type of people in charge of water, as we have in charge of oil and gas, no way! I do not want to have price hikes on every Friday or to be denied water because I am poor. Once someone has control over the water they can decide who gets it and trust me it will be the people, county, city or state that can pay the most for it.

I can also see this causing an international issue. The great lakes are not 100% US though at times they seem to believe that they are. The water is not just for them. I live in Canada, on the edge of one of the lakes. We use it for our water, and trust me it needs to be cleaned up. However if a company in the US is given the right to sell the water from the Great Lakes we are going to have a problem.

First all the water there is not theirs to buy or sell. Second with the potential for abuse, already seen in the fishing industry, how much water would they remove from the lakes to supply people? Canada and the US would soon have very strong words over the control of the water. And let me tell you Canada and Canadians are not going to sit idly by as some company sells off our water. This is not just a US issue, with US rights and laws. Just because the US decides this is the way it is going to be does not make it so. Canada has some say over what happens with the water and who gets what.

The Water Restoration Act of 2007, along with others, gives the federal government complete control over every waterway, river, stream, lake, aquifer, creek, slew, swamp, underground spring and even the rain that runs off your roof. Why? Well to better protect you from polluters and to ensure water safety, and of course “national security”.

Here’s the real deal. Oil which has been deemed the worlds most valuable commodity (remember that word) is quickly being replaced by water. Water is the new “gold”. Under the Public Trust doctrine, the government is prohibited from converting something such as water (a human right…we can’t live without it) to a commodity. It must remain in a public trust, meaning that it is so important to our survival that it should never be subjected to markets, trading or private interests. In other words, it should never be reclassified as a commodity. But this Act lays the groundwork for removing from the Public Trust this basic human right which is a necessity, and will facilitate it being reclassified a “needed commodity”. Enter the multi-national corporations.

What is under way is the effort to classify water as a commodity and not a right. All of this actually started with NAFTA and then CAFTA. Both agreements, which are not enforceable as they are both unconstitutional have been parts of a puzzle that until recently seemed not to make any sense at all. Both are focused on giving multinational corporations the right to lay claim to food production whether it is agriculture or animal ranching, to force out family farms, to patent their new “frankenseeds” and put the resulting GMO food on our grocery shelves without labeling the foods as altered.

The corporations can now sue the government (and have) if it acts in any way to prevent it from making profits it believes it is entitled to. This ability to sue for impaired profit making can be the result of environmental regulations, of Federal laws which may prevent the corporations from hiring illegal workers, or issues of eminent domain in which an individuals’ land stands in the way of corporate profiteering and the courts have not acted to protect the interests of the corporation. The corporation then claims “trade illegal” provisions of NAFTA and CAFTA and our federal laws and regulations are put aside, along with property rights.

All that was left to capture from the public was the water supply. CAFTA goes a long way in establishing the privatization of water supplies, including in-land navigated waters and the right to use and access the water supplies.

If the federal government is not able to gain total control of all water from whatever source, it is highly unlikely that water can be taken from the status of Public Trust and moved to one of a commodity, which is exactly what the Water Restoration Act of 2007 will enable.

If CAFTA protections and provisions for corporations and the provisions within CAFTA that put the rights of investors above those of the individual, or human rights, cannot come into play, it will be nearly impossible to expose our water supply to global markets. CAFTA’s primary aim is to protect and promote investors regardless of the cost to individuals or communities.

Water is not only a basic human right, but also a natural resource. Inland states like Minnesota have Public Trust Laws (in addition to federal doctrine) which maintain the use of waterways for drinking and for recreation purposes. Every lake here has public water access due to the Public Trust which everyone contributes to in one way or another. No one can claim land at the bottom of a lake……its commonly held. No one can claim private ownership of lake fish stocks, or other natural resources resulting from the lake’s existence. This applies to rivers also, including the Mississippi which runs through the state.

The Water Restoration Act of 2007 would federalize all inland and coastal waters from any source. This act is needed to set the stage for the privatization guaranteed to corporations under CAFTA and would effectively convert the entire water supply from any source into a commodity.

As it is, any corporate agriculture business operating in any area is allowed to bypass water treatment plants, sewage treatment and the associated costs and to tap directly into underground aquifers even at the cost of depleting the water supply to the surrounding communities. GMO seeds, especially “traitor” seeds require as much as three times the normal amount of water to activate and to grow, but any efforts to limit use or regulate disposal even by monetary assessment have been unsuccessful. The corporate rights now exceed that of the individual or community. CAFTA clearly states repeatedly that “investor protections” must be a priority.

Using the NAFTA provisions, along with even more detrimental CAFTA provisions, the World Bank along with the United Nations are active in the effort to convert the worlds’ water supply into a commodity to be controlled by private investors via global trade and investment agreements. If these efforts are successful, water will no longer be a community or individual right and resource necessary to maintain life, but a globally traded commodity subject to markets and your ability to pay.

The World Trade organization in collusion with provisions of NAFTA, have been instrumental in converting water into a tradable commodity and as such subject to international trade policies which favor no one but the giant corporations. In each instance of corporations attempting to overturn domestic environmental laws or regulations, the laws have been rendered null using the “trade illegal” provisions of both NAFTA and CAFTA which declare that the right of the corporation cannot be superseded or infringed upon by laws or regulations that hinder the amount of profit they estimate can be attained.

The World Bank already has established a system whereby credit or loans will not be issued to Third World countries and even less stressed countries, unless they agree to allow foreign investors access to privatize the water supply. In Bolivia this resulted in mass demonstrations that finally forced out a subsidiary of Bechtel that had privatized the water supply, increased costs three-fold minimally, dispensed with upkeep and left ¼ of the rural homes without access to water.

England has privatized their water system and costs rose 45% overnight, all but skeleton crews remained of the maintenance sector and the quality of water has dropped significantly.In one Canadian town several people became ill and one died from an ecoli contamination in the water supply. This occurred after the supply had been privatized, and the owner of the water supply knew of the contamination. The public was never notified until after people became ill.

In March of 2000 at the Hague, a meeting occurred where water executives stated that as long as water was coming out of the tap the public had no right to any information as to how it got there….. Or its quality.Here in the States, private investors have in some places succeeded in taking over community water supplies, in other places the communities have fought back against the sale of publicly held supplies realizing that this most important element of human survival should never be under the control of private corporations whose one and only duty is to make a profit for investors.

As water has historically been deemed a human right and necessity, so much so that the Public Trust Doctrine was put on paper, how could anyone in good conscience believe water is, or promote water as, a tradable commodity? How can there be so many callous and greedy individuals running around out there who would willingly see another human thirst to death just so they can make a buck? Apparently there are many.

The Water Restoration Act 2007 relies heavily on promotion based on protecting the water supply from pollution, from terrorists, and of course “national security”. The truth is it has nothing to do with any of these things. The WRA will allow unfettered pollution with no recourse for communities or individuals and “trade illegal” treatment of local and state laws. Before the entire water supply can be sold off to private interests the federal government must gain control of the entire water system. This is what the WRA will do.

This Act would be more aptly titled “The Water Confiscation Act” as this is exactly what is intended. All it is set to do is to strike down the Public Trust Doctrine and facilitate the conversion of water from a basic human right into a commodity. The only threat to “national security” here is from the government and the massive corporations who are behind it.

I guess we shouldn’t be surprised by any of this. After all, the Security & Prosperity Partnership refers to people as “human capital”. I wonder how long it will be before they refer to us as a “needed commodity” and trade and sell us on the global market.

Control the food, control the water and you control the people. I believe it was Henry Kissinger who first made this observation when speaking about the importance of depopulation through the use of eugenics. Obviously good old Henry realized that overtaking the food and water supplies would go a long way in deciding who had a right to life.

AN average Redland ratepayer faces a $230 yearly rise in council rates and charges, including a 79 per cent increase in water usage charges largely blamed on the State Government's water takeover.

Redland City Council's new budget, released today, reveals a household using 200 kilolitres of water annually will pay almost $275 a year in consumption charges - about $120 more than now.

In 2008-09, the council will have to buy water from the State Government.

Mayor Melva Hobson says the State will be charging the council much more to buy bulk water than it currently costs the council to produce from its own supplies.

The council's acting chief executive officer, Ray Turner, said 63 per cent of the water usage charge rise was a result of the State's takeover.

The yearly water access charge will rise by $10 to $207, the sewerage charge will rise $40 to $635, and the environment charge will rise by $15 to $87.80 to fund bushland acquisition and key actions of the koala strategy.

The waste and recycling charge will rise $5 to $230. For the first time, the council will charge residents $4 to visit the dump to dispose of their waste.

Cr Hobson said the dump fees were based on the user-pays principle. If the gate fees were not introduced, all ratepayers would face a greater increase to their waste charges, she said.

Southern Bay Island property owners face an increase of about 22 per cent in their total rates and charges. Apart from the water rises, this increase is due to a doubling of the money raised for a special fund to pay for island infrastructure.

Last year the council introduced a differential rate to raise about $80 per island property for this special fund. This rises to about $160 this time.

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WeAreChange BrisbaneI hold personal views, beliefs and opinions that do not necessarily reflect the beliefs and opinions of WeAreChange Brisbane as a whole.

July 11 (Bloomberg) -- Australia's government bought 35 billion liters of water back from farmers to boost flows in the Murray Darling Basin, home to almost half the nation's farms.

The first direct purchase of water by the federal government for the basin cost an initial A$50 million ($48 million), Penny Wong, minister for climate change and water said today in an e- mailed statement.

Drought in the Murray Darling Basin worsened and inflows into the system in June were the lowest on record, the body that manages the system said yesterday. The government plans to spend A$3.1 billion buying back water to return to rivers in the basin for the environment.

``Purchasing water from willing sellers is a crucial step in supporting healthy rivers and tackling the effects of climate change,'' Wong said in the statement.

VAN BUREN TOWNSHIP, Mich. - Republican presidential candidate John McCain says Michigan and other Great Lakes states are right to protect their water from dry regions such as his home state of Arizona.

McCain told The Associated Press in an interview after a Michigan campaign stop in suburban Detroit Thursday that he supports the Great Lakes compact. Michigan on Wednesday became the last of the eight states involved to join the compact when Governor Jennifer Granholm signed the compact bill into law.

"I've often had dreams of giant pipe that ended up in my backyard in Phoenix," McCain joked. "But the fact is that any decision concerning water should be made by the people who own the water. That's the states."

McCain says he can't envision a scenario in which Great Lakes water would be shipped elsewhere.

The agreement outlaws diversions of Great Lakes water from their natural drainage basin with rare exceptions, while requiring the states to regulate their own large-scale water use.

The pact still needs approval of Congress and the White House. McCain is among more than 20 members of Congress who have endorsed the compact, as has Democratic presidential candidate and fellow senator Barack Obama.

The Canadian provinces of Ontario and Quebec have adopted a nearly identical document. They could not join the compact because U.S. states cannot make treaties with foreign governments.

The Council of Great Lakes Governors spent four years negotiating the deal amid rising concern that the worldwide freshwater shortage would lead thirsty regions to tap into the lakes.

U.S. Sen Dianne Feinstein and Gov. Arnold Schwarzenegger on Thursday unveiled a proposal for $9.3 billion in state bonds to build reservoirs, improve water quality, boost conservation and help manage the Sacramento-San Joaquin Delta.

The plan, months in preparation, would go to the Legislature for approval, and if approved from there to voters in November, according to published reports.

While many of the players involved in the fight over California's water infrastructure said they needed more details before they decide whether to buy in, the initial response from many was optimistic.

"We strongly support this latest bipartisan effort to kick-start negotiations on a comprehensive water bond," said Timothy Quinn, executive director of the Association of California Water Agencies, in a news release. "California is in the most severe water crisis in recent history, and there is literally no time to waste. It's hugely important that we have a specific, bipartisan proposal on the table as something we can negotiate around.

"While we have not had time to analyze this proposal in depth," Quinn said, "it appears to be close to the mark in terms of comprehensively addressing the state's water needs. We urge the Legislature to move ahead with its negotiations."

The Republican governor and the senator, a Democrat, took steps as early as February to break a logjam on the issue of capital improvements for water.

The Associated Press reported that the compromise proposal includes $3 billion for reservoirs and other storage projects, with costs to be split between the state and local water providers; $2 billion for projects to use water more efficiently, protect its quality and reduce runoff; $1.9 billion to develop a Delta management plan; $1.3 billion for conservation programs along the Sacramento, San Joaquin and Klamath rivers and the Salton Sea; and more than $1 billion to improve groundwater quality and recycle water.

It surrounds us, fills us and we are entirely dependent upon it for our survival, yet water is probably one of the most overlooked sectors within the market.

The ISE Water Index (HHO) has enjoyed an impressive rally this year, while the world remains focused on the rising price of crude oil and the flagging performance of the dollar. The ISE Water Index is composed of companies engaged in water distribution, water filtration, flow technology and other water solutions. The index has tacked on nearly 5% since the start of 2008, easily outpacing the S&P 500 Index’s (SPX) loss of 7.7% during the same time frame.Click here to download "Energy Bull Market: Six Must-Own Stocks."

The ISE Water Index has been buoyed by solid support from its ascending 10- and 20-day moving averages for most of 2008 and is now hovering close to its all-time high of 95.19. In fact, the index has climbed steadily higher since it was created in January 2006, gaining more than 36% along the way.

One company definitely worth watching within the ISE Water Index is Flowserve. The company makes pumps, valves and mechanical seals, and it is the world's largest provider of pumps for the chemical, petroleum and power industries, selling its products and services to more than 10,000 customers around the globe.Special Offer: How high will Potash Saskatchewan (POT) climb? Should you still be a bull on fertilizer stocks--or is the bullish case a bunch of manure? How about gold--is that party over? Click here for daily recommended trades in Bernie Schaeffer's Option Advisor.

Flowserve shares have been in a strong uptrend since late January and have gained roughly 40% since the beginning of 2008, climbing along the support of their ascending 10- and 20-day moving averages. But this is just a small part of the security’s long-term uptrend that started in March 2007. The equity is currently consolidating into support at its 10-week moving average, which it could use as a springboard to launch it higher.

However, investors are quite skeptical of the shares. The Schaeffer’s put/call open interest ratio (SOIR) stands at 1.27, as put open interest easily outweighs call open interest among June and July options. This preference for put options indicates that investors aren’t expecting the shares to rally much higher during the near term. What’s more, this ratio is higher than 89% of all those taken during the past 52 weeks. In other words, short-term speculators have been more pessimistically aligned just 11% of the time during the past year.

Furthermore, Wall Street has yet to jump on this outperforming security. According to Zacks, only four brokerage firms following the firm and not one of these gives it a "buy" rating. Any upgrades and/or fresh coverage from the various brokerage firms could help to give the shares a boost. To take advantage of a rally in the shares, investors should consider the stock’s July 135 call.Special Offer: Profit as stocks go up and go down. Although it can be nerve-racking, you can make money on price declines if you own puts. Which stocks and ETFs are most likely to slip most? Financials? Tech? Fertilizers? Click here for recommended trades with a 30-day free trial of Option Advisor.Another strong security within the HHO is Danaher. The company has a professional instrumentation group that produces environmental and electronic testing technology. It offers product identification equipment and consumables; motion, position, speed, temperature, level instruments and sensing devices; liquid flow and quality measuring devices; aerospace safety devices and defense articles; and electronic and mechanical counting and controlling devices.

Since mid-March, Danaher has trekked higher, creating a series of higher lows. What’s more, the stock has reclaimed the 80-level, which is also home to the security’s rising 10-month moving average. The trend line has carried the stock higher during the past several years along with its 20-month trend line. It appears that the shares are now poised to resume their long-term uptrend.

Much like Flowserve, options players have taken a bearish stance toward Danaher. The put/call open interest ratio for the security stands at 1.03, as put open interest outweighs call open interest. This ratio is also higher than 83% of all those taken during the past 52 weeks. Meanwhile, six of the 17 analysts following DHR rate it a "hold," leaving the door open for potential upgrades. A July 80 call would allow a trader to benefit from a bounce off support at the stock’s long-term support.

Not all is well in water world. Aqua America is a utility holding company that provides water and wastewater services through its operating subsidiaries to about 2.8 million residents in more than a dozen states, including Florida, New Jersey, New York, and Pennsylvania. In addition, Aqua America provides water or wastewater services to Philadelphia and in 23 other counties in Pennsylvania, or about half of the company's total customers. Despite providing these indispensable services, the stock has been in a steep downtrend under its 10- and 20-week moving averages since late September. In fact, during this time frame, the stock has shed more than 28%.

Investors, however, are extremely optimistic about Aqua America’s prospects. The Schaeffer’s put/call open interest ratio for WTR stands at 0.35 and is lower than all but 7% of the readings taken during the past 52 weeks. Should the optimists grow weary of the stock’s downtrend, they could close out their long positions, creating more selling pressure on the shares. There is also ample room for downgrades, as five of the eight analysts following WTR rate it a "buy" or better. Any downgrades for WTR could spell trouble for the shares.

One final concern comes from short sellers. Roughly 15.2 million WTR shares have been sold short, accounting for nearly 12% of the company’s total float. If these short sellers decided to add to their winning positions, it could create a fresh round of selling pressure for the shares. To take advantage of the stock’s steady downtrend, traders should look to the stock’s September 17.50 put.

Property owners should not underestimate the vast “takings” that would occur if a bill pending in Congress is enacted. The bill, called the Clean Water Restoration Act (H.R. 2421), authored by Rep. James Oberstar, is a wolf in sheep’s clothing.

Don't think you're safe if you're off the water grid. Under this legislation, the government can come on your land and suck your well dry, confiscate your barrel of rainwater, or even the bottles of water in your refrigerator. No water is safe from them. They may even try to claim the very water circulating in your body as under their control.

A "watershed moment" has arrived!…Literally. One of the most dynamic and profitable themes for the rest of this decade will be investing in water. Purifying, filtering, transporting, storing and bottling water will become increasingly important global businesses.

Three months ago I wrote to you from Colorado, on the edge of the Great American Desert. This month, I'm writing to you from another arid region, Australia. Yes, there's water in the tropical north. But most of the Australian landscape is as dry as Carry Nation.

Investing in Water: Water Is Taken For Granted

Americans seem to believe. We often take it for granted. But most of the world's residents do not…and for good reason. 97% of the world's water is non-potable salt water, which leaves only 3% that could be consumed by humans…and most of that "water" is trapped in glaciers and icecaps.

Clean, fresh water is not nearly as plentiful as most

In mid-December, the premiers of Quebec and Ontario, along with the governors of eight U.S. states, signed a pact that will ban all large-scale water diversions from the Great Lakes basin. That will prevent fully 20% of the total fresh surface water of the Earth being exported by pipeline to thirsty states like California, Arizona, or Nevada. The eight states that border the Great Lakes - Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania, and Wisconsin - have seen the future. And the future is that fresh surface water is going to be more and more valuable as it gets more and more scarce.Investing in Water: EFT's

Investing in water has never been particularly easy. But it just got a little easier.

PowerShares has come out with a new exchange-trade fund (ETF) based on water stocks. It's called the PowerShares Water Resources Portfolio (PHO). According to the prospectus, "The index seeks to identify a group of companies that focus on the provision of potable water, the treatment of water, and the technology and service that are directly related to water consumption."

There are a couple of things you should know about PowerShares ETFs that make them different from other ETFs on the market. But since my friend Dr. Steve Sjuggerud beat me to the punch on the virtues of PowerShares compared with other ETFs, I'll let him explain:

"PowerShares actually started out by asking, 'What would the customer want?'

"As the customer, I want broad exposure to a sector (maybe 30 stocks). Don't mess with it too much, please. But if you must mess with it, please kick out the 'dogs' every once in a while, and don't just passively sit by and watch them go to zero.

"And please don't load up on overpriced stocks simply because the market value of these stocks has gone up. I don't want the fund to buy more and more of what's already become super expensive. PowerShares fulfill both of these objectives…

"Each PowerShares sector ETF actually contains 30 stocks. And most importantly to me, no stock can make up more than 5% of the portfolio. So the biotech PowerShares, for example, couldn't possibly have two stocks make up two-thirds of the assets. Simple stuff. But great stuff.

"Thankfully, the dogs can also be kicked out… stocks that appear attractive (based on quantitative measures) can be let in…and the super-expensive stocks will still never make it to more than 5% of the portfolio. That's because instead of holding a fixed portfolio, the PowerShares portfolio changes quarterly based on dynamic underlying indexes, called 'Intellidexes.'

"PowerShares allow me to invest in sectors the way I want…where all 30 stocks in the fund actually affect the performance, which is exactly the diversification I expect from investing in exchange-traded funds."

Steve makes all the important points. You get the diversification of an ETF across a basket of stocks. But you also get a little more active management from the changes that the PowerShares team makes in the index. The dogs are ditched. And with no stock making up more than 5% of the basket of stocks, you are not vulnerable to an index crash prompted by the decline of a single stock.

Investing in Water: Higher Costs But Higher Gains

The only drawback of the PowerShares method is that you will incur higher brokerage costs and taxable gains because the fund is actively managed. But for the better diversification and performance, your total return on the fund should be much higher, even after the additional costs.

And if there's a downside to the diversification, it's that you'll end up owning small pieces of stocks that seem only peripherally related to the water theme. For example, General Electric (GE) makes up 0.85% of the index. But a full slate of water utilities are also included among the holdings, with other water treatment and service companies rounding out the rest of it.

The intrepid investor may prefer to review each of the 35 particular holdings and construct a smaller portfolio of key water stocks to own for the next 10 years. But for the simplest way to be "long water" in 2006, this is it. The stock just launched in mid-December.

By the end of 2006, water will not only be a major geopolitical theme, but also a major investmenttheme…Drink up!Dan Denning, Editor Strategic InvestmentFor The Rude Awakening

Investing in Water: Blue GoldBy Chris Mayer

A gallon of crude oil costs $1.45 [$3.45 corrected]. A gallon of Evian costs $11.91. This simple observation led one successful investor to assert that oil is undervalued.

We see things a little differently…Oil may be undervalued, but NOT relative to drinking water. In fact, the truth is exactly the opposite.

Investing in Water: An In Demand Resource

For most of the world, clean drinking water is a far more precious commodity than oil.

While water largely covers this hardscrabble little planet of ours, less than 3% of it is fresh water. And the presence of pollution and disease has made much of that water undrinkable. Unlike with oil, no amount of technological wizardry can replace water.

Water resource enthusiasts, such as money manager John Dickerson, know these facts well. He is familiar with all of water's charms - but the biggest is the simple scarcity of clean water.

There are few industrial countries in the world feeling that scarcity more acutely than China. Its water needs are more critical than its much ballyhooed power needs. I did not fully appreciate this until I visited China myself and talked to Chinese business people. Even Chinese officials - prone to covering up or understating the extent of problems - sound alarmist when it comes to water.

One official recently said China's problem is "more serious and urgent than [in] any other country in the world." China's rapid industrialization has outpaced its water infrastructure, which is on the verge of collapse. As Minister of Water Resources Wang Shucheng noted, "The price of China's economic boom is being paid in water." Two-thirds of China's 600 largest cities don't have enough water; half of these cities have polluted groundwater. Less than 15% of China's population has safe drinking water from tap. The recent spill in the Songhua River, widely covered in the media, only worsens the problem.

For further perspective, consider this: China has about as much water as Canada, but a population 40 times as large. On a per capita basis, China's water reserves are only about one-quarter of the global average. Worse, the distribution of people and water creates its own logistical obstacles. Nearly half of China's population resides in the northeastern provinces, where only 14% of the water resources are located.

These facts provide endless challenges for the Chinese. Water shortages are a serious threat to China's booming economy. It costs billions each year in lost output. Plus, water efficiency in China is way behind that of developed countries. As Dickerson says, for an equivalent amount of work, "China uses approximately 7-15 times more water than do developed countries, and with usable water supplies steadily diminishing, will not their competitive position also begin to erode?"

The Christian Science Monitor in December 2004 contained a provocative article suggesting that we could see a cartel of water-exporting countries emerge over the next decade, in a style not unlike the Organization of Petroleum Exporting Countries. "Water is blue gold; it's terribly precious," Maude Barlow, chairwoman of the Council of Canadians, told the Monitor, "Not too far in the future, we're going to see a move to surround and commodify the world's fresh water. Just as they've divvied up the world's oil, in the coming century, there's going to be a grab."

Whether or not you choose to believe Barlow, it is clear that the demand for clean water is real. In an attempt to avert crisis, China plans to build hundreds of new water treatment plants. But for now, bottled water is the preferred choice - even among the Chinese, at least among those who can afford it. When I was in China, bottled water was nearly everywhere. As the Monitor points out, consumption of bottled water nearly quadrupled between 1997-2002.

So how to play it?

Investing in Water: Two Companies To Watch

There are several interesting companies working on the water crisis in China. I'll run through two of them below. These are not the only companies engaged in solving China's water resource problems, but they were two of the more interesting stories I found. The largest water company in the world is Veolia Environnement, of France, and, oddly enough, a spinoff of entertainment giant Vivendi. Veolia has a 20-year deal to provide water to Tianjin as well as a bundle of other water and waste management contracts throughout China. Veolia currently serves over 14 million residents in China.

Another company is Watts Water Technologies, which has been doing business in China since 1995. The company produced valves used in China's Three Gorges Dam project on the Yangtze River. In November, the company increased its commitment to China by acquiring Changsha Valve Works.

According to Watts, Changsha is "a leading manufacturer of large-diameter hydraulic-actuated butterfly valves for thermopower and hydropower plants, water distribution projects and water works projects in China. This acquisition strengthens Watts' position in the fast-growing water market."

There are two problems here. First, neither company does all that much business in China. Veolia's contracts bring in only a small fraction of its more than $30 billion in sales. Watt's China revenues represent only 3% of sales at this point. This is a common drawback in looking at publicly traded water companies (excluding micro-caps).

If you want more concentrated exposure to China's water crisis, it seems impossible at this point. The other problem is that none of these companies strike me as being particularly cheap. Still, they remain interesting companies to watch - we may get a chance to own them at excellent prices down the road. And as the Chinese water crisis unfolds, it may become clearer as to who and where the winners in this struggle will be. One thing seems certain:

Clean drinking water will remain more precious than oil - especially in China.

Ten years ago next Monday, a massive earthquake rolled under the Japanese city of Kobe at dawn, toppling 140,000 buildings, causing 300 major fires, killing more than 5,000 people and leaving 300,000 homeless.

To help cover the story for the L.A. Times, I left my wife to care for our 10-day-old daughter and 2-year-old son and flew into the city with a small team of Los Angeles-based trauma doctors and nurses. We found a surreal, smoking ruin of a city with roads twisted like coils of rope, high-rises tilted at Dr. Seuss angles and thousands of middle-class families jammed into dingy, ice-cold rooms in the few public buildings left standing.

Just as in the tsunami zone of South Asia this month, the immediate health danger, besides a possible outbreak of disease, was a lack of fresh water. More than 75% of the citys water supply was destroyed when underground pipes fractured. As much as they desired pallets of drugs, food, blankets and tents sent from throughout Japan and abroad, the Kobe survivors coveted -- and needed -- clean, bottled water for cooking, drinking and bathing.

Both incidents are a stark reminder that water is our most precious resource. Because it is seemingly ubiquitous in the United States, it is taken for granted. Massive snowstorms in California this month have loaded up the snowpack that provides water there, and rains in the Southeast are filling reservoirs in that part of the country.

The rest of the world, however, is not so fortunate.

Not making any more waterThere is no more fresh water on Earth today than there was a million years ago. Yet today, 6 billion people share it. Since 1950, the world population has doubled, but water use has tripled, notes John Dickerson, an analyst and fund manager based in San Diego. Unlike petroleum, he adds, no technological innovation can ever replace water.

China, which is undergoing a vast rural-to-urban population migration, is emblematic of the places where water has become scarce. It has about as much water as Canada but 100 times more people. Per-capita water reserves are only about a fourth the global average, according to experts. Of its 669 cities, 440 regularly suffer moderate to critical water shortages.

Although not widely appreciated, water has been recognized by conservative investors as an investment opportunity -- and it has rewarded them. Over the past 10 years, the Media General water utilities index is up 133%, double the return of the Dow Jones Utilities Index ($UTIL). Over the past five years, water utilities are up 32% -- clobbering the flat returns of both the Dow Jones Utilities and the Dow Industrials ($INDU). One of waters key long-term value drivers as an investment, according to Dickerson: Demand is not affected by inflation, recession, interest rates or changing tastes.

Virtually all of the U.S. water utility stocks are regulated by states and counties, which makes them pretty dull. Governmental entities typically give utilities a monopoly in a geographic region, then set their profit margin a smidge above costs. Just about the only distinguishing factor among them are the growth rates of their regions and their ability to efficiently manage their underground pipe and pumping infrastructure. Among the best are Aqua America (WTR, news, msgs) of Philadelphia, Southwest Water (SWWC, news, msgs) of Los Angeles; California Water Service Group (CWT, news, msgs), based in San Jose, Calif.; and American States Water (AWR, news, msgs) of San Dimas, Calif.

In a moment, Ill offer a couple of potentially more impactful ways to invest in water, but first lets look a little more broadly at world demand.

Aquifers in India are being sucked dryThe tsunami has focused attention on water demand in South Asia -- and its a good thing, as it was already reaching critical status in rural areas. Several decades ago, farmers in the Indian state of Gujarat used oxen to haul water in buckets from a few feet below the surface. Now they pump it from 1,000 feet below the surface. That may sound good, but they have been drawing water from the earth to feed a mushrooming population at such a terrific rate that ancient aquifers have been sucked dry -- turning once-fertile fields slowly into sand.

According to New Scientist magazine, farmers using crude oilfield technology in India have drilled 21 million "tube wells" into the strata beneath the fields, and every year millions more wells throughout the region -- all the way to Vietnam -- are being dug to service water-needy crops like rice and sugar cane. The magazine quoted research from the annual Stockholm Water Symposium that the pumps that transformed Indian farming are drawing 200 cubic kilometers of water to the surface each year, while only a fraction is replaced by monsoon rains. At this rate, the research suggested, groundwater supplies in some areas will be exhausted in five to 10 years, and millions of Indians will see their farmland turned to desert.

In China, the magazine reported, 30 cubic kilometers more water is being pumped to the surface each year than is replaced by rain -- one of the reasons that the country has become dependent on grain imports from the West. This is not just an issue for agriculture. Earlier this year, the Indian state of Kerala ordered the PepsiCo (PEP, news, msgs) and Coca-Cola (KO, news, msgs) bottling plants closed due to water shortages, costing the companies millions of dollars.

In this country, shareholder activists already are lobbying companies to share water-dependency concerns worldwide with their stakeholders in their financial statements.

Water, water everywhere, but . . .The central problem is that less than 2% of the worlds ample store of water is fresh. And that amount is bombarded by industrial pollution, disease and cyclical shifts in rain patterns. Its increasing scarcity has impelled private companies and countries to attempt to lock up rights to key sources. In an article last month, the Christian Science Monitor suggested that the next decade may see a cartel of water-exporting countries rivaling the Organization of Petroleum Exporting Countries for dominance in the world economy.

"Water is blue gold; it's terribly precious," Maude Barlow, chair of the Council of Canadians, told the Monitor. Not too far in the future, we're going to see a move to surround and commodify the world's fresh water. Just as they've divvied up the world's oil, in the coming century, there's going to be a grab."

Besides the domestic water utilities listed above -- and similarly plodding foreign utilities such as United Utilities (UU, news, msgs) of the United Kingdom, which sports a 6.9% dividend yield, and Suez (SZE, news, msgs) of France -- investors interested in the sector can consider a number of variant plays. None are extremely exciting, but my guess is that, over the next few years, some more interesting purification technologies will emerge, along with, perhaps, a vibrant attempt at worldwide industry consolidation.

One current idea is Tennessee-based copper pipe and valve maker Mueller Industries (MLI, news, msgs), a $1 billion business with a trailing price/earnings multiple of 15 that is still not expensive despite a 47% run-up in the past year. Its leading outside investor is Berkshire Hathaway (BRK.A, news, msgs), the investment vehicle of legendary investor Warren Buffett.

Another is flow-control products maker Watts Water Technologies (WTS, news, msgs), which is a little richer at a $975 million market cap and a trailing P/E multiple of 19, but is still owned by several leading value managers, including Mario Gabelli.

And possibly the most interesting is Consolidated Water (CWCO, news, msgs), a $160 million company based in the Cayman Islands that specializes in developing and operating ocean-water desalinization plants and water-distribution systems in areas where natural supplies of drinking water are scarce, such as the Caribbean and South America. It currently supplies water to Belize, Barbados, the British Virgin Islands and the Bahamas, and it has expansion plans. It is the most expensive, but it may also have the greatest growth prospects. Of all of these, it is up the most over the past five years, a relatively steady 355%.

Of course, there is one other benefit to water investing: When these companies say theyre going to do a dilutive deal, its not something to worry about.

Fine PrintDickerson runs a hedge fund in San Diego strictly focused on water investing, the Summit Water Equity Fund. . . To learn more about Southwest Water, click here. . . . To learn more about California Water Service Group, which runs systems in New Mexico, Hawaii and Washington State, as well as California, click here. . . . To learn more about American States Water, click here. . . To learn more about Mueller, click here, and, for Consolidated Water, click here.

Jon D. Markman is publisher of StockTactics Advisor, an independent weekly investment newsletter, as well as senior strategist and portfolio manager at Pinnacle Investment Advisors. While he cannot provide personalized investment advice or recommendations, he welcomes column critiques and comments at jon.markman@gmail.com; put COMMENT in the subject line. At the time of publication he held positions in the following stocks mentioned in this column: Coca-Cola.

Global Water ResourcesAbout 70% of the earth's surface is covered in water, but 97% of it is saltwater, which is unfit for human use. Saltwater cannot be used for drinking, crop irrigation or most industrial uses. Of the remaining 3% of the world's water resources, only about 1% is readily available for human consumption.

Global ShortageRapid industrialization and increasing agricultural use have contributed to worldwide water shortages. Areas that have experienced water shortages include China, Egypt, India, Israel, Pakistan, Mexico, parts of Africa and the United States (Colorado, California, Las Vegas and the East Coast), to name but a few.

Pollution also highlights the need for clean water. In the U.S., the dead zone off the Gulf Coast highlights the impact of fertilizer runoff, and methyl tertiary butyl ether (MTBE), an additive in unleaded gasoline, can be found in well water from California to Maryland. Overseas, highly publicized incidents in Russia, China and elsewhere demonstrate that pollution isn't limited to the West. Of course, fouled water supplies further limit the amount of fresh water available for human use.

IndexesLike any other scarcity, the water shortage creates investment opportunities, and interest in water is at an all-time high. Here are some of the more popular indexes designed to track various water-related investment opportunities:

* Palisades Water Index - This index was designed to track the performance of companies involved in the global water industry, including pump and filter manufacturers, water utilities and irrigation equipment manufacturers. The ticker symbol for the Palisades Water Index is ZWI. The index was set at 1000 as of December 31, 2003. It closed at 1351.08 on December 30, 2005. * Dow Jones U.S. Water Index - Composed of approximately 23 stocks, this barometer climbed from 500 to 800 over the 12 months ending December 31, 2005. The ticker for the Dow Jones Water Index is DJUSWU. * ISE-B&S Water Index - Launched in January 2006, this new index represents water distribution, water filtration, flow technology and other companies that specialize in water-related solutions. It contains 20 stocks. The ticker for the ISE-B&S Water Index is HHO. * S&P 1500 Water Utilities Index - A sub-sector of the Standard & Poor's 1500 Utilities Index, this index is composed of just two companies, American States Water (ticker: AWR) and Aqua America (ticker: WTR). In 2005, the S&P 1500 Water Utilities Index rose in excess of 45% .

The Bloomberg World Water Index and the MSCI World Water Index provide a look at the water industry from an international perspective, although it can be rather difficult to find current information about either index. There are also a variety of utility indexes that include some water stocks. (For further reading, see Indexes: The Good, The Bad And The Ugly.)

Investment OpportunitiesA look at the holdings of any of the water indexes provides an easy way to begin your search for suitable investments. Companies from blue chip stalwart General Electric to micro cap Layne Christensen are all seeking a piece of the water market. In addition to direct stock purchases, some of the larger firms offer dividend reinvestment plans. Firms seeking to profit from water-related businesses include beverage providers, utilities, water treatment/purification firms and equipment makers, such as those that provide pumps, valves and desalination units.

When it comes to bottled water, the market is growing internationally. Demand is on the rise from China to Mexico, following in the footsteps of the spike in U.S. consumer demand. The Beverage Marketing Corp. reports that the bottled water market in the U.S. grew 19% in 2004, and U.S. consumers drank 26 gallons of bottled water per person in 2005, up from 11.7 gallons in 1995. On the desalination front, some 100 countries currently rely on desalination for at least part of their freshwater consumption needs.

If stock picking doesn't interest you, ETFs, mutual funds and unit investment trusts (UITs) also provide plenty of opportunities to invest in water. The PowerShares Water Resource ETF (ticker: PHO), mentioned earlier, tracks the Palisades Water Index, and the iShares Dow Jones U.S. Utilities Index ETF (ticker: IDU) provides some exposure to water-related stocks. On the mutual find side, as with ETFs, pure-play water funds are hard to find, but funds such as the New Alternatives Fund (ticker: NALFX) and the ICON Telecommunications & Utilities Fund (ticker: ICTUX) provide some exposure to the sector, as do numerous other utility funds and ETFs. (To learn more, see Introduction To Exchange-Traded Funds.)

Additionally, two unit investment trusts that specialize in water-related investments are the Claymore-Boenning & Scattergood Global Water Equities UIT (ticker: CGWEAX) and the Claymore-Boenning & Scattergood U.S. Water Equities portfolio (ticker: CUSWAX).ConclusionRecent years have seen an upswing in the demand for investments that seek to profit from the need for fresh, clean water. If the trend continues, and by all indications it will, investors can expect to see a host of new investments that provide exposure to this precious commodity and to the firms that deliver it to the marketplace. There are currently numerous ways to add water exposure to your portfolio - most simply require a bit of research.

Just as with any other investment in commodities or sector funds, wise investors should limit their exposure to water. Generally speaking, highly concentrated investments such as these should not represent more than 10% of the assets in a well-diversified portfolio. Limiting exposure to concentrated positions provides some opportunity to capture positive returns while limiting overall portfolio volatility.

Ever wondered who owns the water in the underground source, known as an aquifer, that suppliesyour well and drinking water system? Who gets access to water during drought and shortages? If yourlocal government can limit a developer’s access to dwindling water supplies to build new homes?The answers to these questions vary from state to state and are rarely simple. The rights to groundwater are governed by state statutes and case law that have evolved over the last century. Today,states generally follow one of five “rules” in deciding “Who Owns the Water?”

The Absolute Dominion RulePermits a landowner to intercept ground water that would otherwise have been available to a neigh-boring water user and even to monopolize the yield of an aquifer without incurring liability.Eight states adopted or indicated a preference for the Absolute Dominion rule: Connecticut, Indiana,Louisiana, Maine, Massachusetts, Mississippi, Rhode Island and Texas.

The Reasonable Use RuleLimits a landowner’s use of water to those uses that have a reasonable relationship to the use of theoverlying land. The rule is essentially the rule of absolute ownership with exceptions for wasteful andoff-site use.

Four of these states adopted the Reasonable Use rule in conjunction with the Prior Appropriation rule:Arkansas, Delaware, Missouri and Wyoming. Another state, Nebraska, adopted a Reasonable Use rulein conjunction with the Correlative Rights rule.The Correlative Use RuleMaintains that the authority to allocate water is held by the courts. Owners of overlying land and non-owners or transporters have co-equal or correlative rights in the reasonable, beneficial use of groundwater. A major feature of this doctrine is the concept that adjoining lands can be served by a singleaquifer. Therefore, the judicial power to allocate water permits protects both the public’s interest andthe interests of private users.

Six states adopted or indicated a preference for the Correlative Rights rule: California, Hawaii, Iowa,Minnesota, New Jersey and Vermont.

The Restatement of Torts RuleHolds that a landowner who uses ground water for a beneficial purpose is not subject to liability forinterference if certain conditions are met. The water withdrawal cannot cause unreasonable harm toa neighbor by lowering the water table or reducing artesian pressure, cannot exceed a reasonableshare of the total store of ground water and cannot create a direct and substantial effect on a water-course or lake.

Three states adopted or indicate a preference for the Restatement of Torts doctrine: Michigan, Ohioand Wisconsin.

This article appeared in the September 2, 2002 edition of The Nation.August 15, 2002"Water promises to be to the 21st century what oil was to the 20th century: the precious commodity that determines the wealth of nations."

As the World Summit on Sustainable Development draws closer, clear lines of contention are forming, particularly around the future of the world's freshwater resources. The setting of the summit paints the picture. Government and corporate delegates to the September meeting will gather in the lavish hotels and convention facilities of Sandton, the fabulously wealthy Johannesburg suburb that houses huge estates, English gardens and swimming pools, and has become South Africa's new financial epicenter. There, they will meet with World Bank and World Trade Organization officials to set the stage for the privatization of water.

At the same time, activists from South Africa and around the world with a very different vision will gather in very different settings to fight for a water-secure future. One such venue will be Alexandra Township, a poverty-stricken community where sanitation, electricity and water services have been privatized and cut off to those who cannot afford them. Alexandra is situated right next door to Sandton and divided only by a river so polluted that it has cholera warning signs on its banks. There could not be a more fitting setting for Rio+10 than South Africa, because neighboring Sandton and Alexandra represent the great divide that characterizes the current debate over water. Moreover, South Africa is the birthplace of one of the nucleus groups that form the heart of a new global civil society movement dedicated to saving the world's water as part of the global commons.

This movement originates in a fight for survival. The world is running out of fresh water. Humanity is polluting, diverting and depleting the wellspring of life at a startling rate. With every passing day, our demand for fresh water outpaces its availability, and thousands more people are put at risk. Already, the social, political and economic impacts of water scarcity are rapidly becoming a destabilizing force, with water-related conflicts springing up around the globe. Quite simply, unless we dramatically change our ways, between one-half and two-thirds of humanity will be living with severe freshwater shortages within the next quarter-century.

It seemed to sneak up on us, or at least those of us living in the North. Until the past decade, the study of fresh water was left to highly specialized groups of experts--hydrologists, engineers, scientists, city planners, weather forecasters and others with a niche interest in what so many of us took for granted. Many knew about the condition of water in the Third World, including the millions who die of waterborne diseases every year. But this was seen as an issue of poverty, poor sanitation and injustice--all areas that could be addressed in the just world for which we were fighting.

Now, however, an increasing number of voices--including human rights and environmental groups, think tanks and research organizations, official international agencies and thousands of community groups around the world--are sounding the alarm. The earth's fresh water is finite and small, representing less than one half of 1 percent of the world's total water stock. Not only are we adding 85 million new people to the planet every year, but our per capita use of water is doubling every twenty years, at more than twice the rate of human population growth. A legacy of factory farming, flood irrigation, the construction of massive dams, toxic dumping, wetlands and forest destruction, and urban and industrial pollution has damaged the Earth's surface water so badly that we are now mining the underground water reserves far faster than nature can replenish them.

The earth's "hot stains"--areas where water reserves are disappearing--include the Middle East, Northern China, Mexico, California and almost two dozen countries in Africa. Today thirty-one countries and over 1 billion people completely lack access to clean water. Every eight seconds a child dies from drinking contaminated water. The global freshwater crisis looms as one of the greatest threats ever to the survival of our planet.

Washington Consensus

Tragically, this global call for action comes in an era guided by the principles of the so-called Washington Consensus, a model of economics rooted in the belief that liberal market economics constitutes the one and only economic choice for the whole world. Competitive nation-states are abandoning natural resources protection and privatizing their ecological commons. Everything is now for sale, even those areas of life, such as social services and natural resources, that were once considered the common heritage of humanity. Governments around the world are abdicating their responsibilities to protect the natural resources in their territory, giving authority away to the private companies involved in resource exploitation.

Faced with the suddenly well-documented freshwater crisis, governments and international institutions are advocating a Washington Consensus solution: the privatization and commodification of water. Price water, they say in chorus; put it up for sale and let the market determine its future. For them, the debate is closed. Water, say the World Bank and the United Nations, is a "human need," not a "human right." These are not semantics; the difference in interpretation is crucial. A human need can be supplied many ways, especially for those with money. No one can sell a human right.

So a handful of transnational corporations, backed by the World Bank and the International Monetary Fund, are aggressively taking over the management of public water services in countries around the world, dramatically raising the price of water to the local residents and profiting especially from the Third World's desperate search for solutions to its water crisis. Some are startlingly open; the decline in freshwater supplies and standards has created a wonderful venture opportunity for water corporations and their investors, they boast. The agenda is clear: Water should be treated like any other tradable good, with its use determined by the principles of profit.

It should come as no surprise that the private sector knew before most of the world about the looming water crisis and has set out to take advantage of what it considers to be blue gold. According to Fortune, the annual profits of the water industry now amount to about 40 percent of those of the oil sector and are already substantially higher than the pharmaceutical sector, now close to $1 trillion. But only about 5 percent of the world's water is currently in private hands, so it is clear that we are talking about huge profit potential as the water crisis worsens. In 1999 there were more than $15 billion worth of water acquisitions in the US water industry alone, and all the big water companies are now listed on the stock exchanges.

Water Lords

There are ten major corporate players now delivering freshwater services for profit. The two biggest are both from France--Vivendi Universal and Suez--considered to be the General Motors and Ford of the global water industry. Between them, they deliver private water and wastewater services to more than 200 million customers in 150 countries and are in a race, along with others such as Bouygues Saur, RWE-Thames Water and Bechtel-United Utilities, to expand to every corner of the globe. In the United States, Vivendi operates through its subsidiary, USFilter; Suez via its subsidiary, United Water; and RWE by way of American Water Works.

They are aided by the World Bank and the IMF, which are increasingly forcing Third World countries to abandon their public water delivery systems and contract with the water giants in order to be eligible for debt relief. The performance of these companies in Europe and the developing world has been well documented: huge profits, higher prices for water, cutoffs to customers who cannot pay, no transparency in their dealings, reduced water quality, bribery and corruption.

Water for profit takes a number of other forms. The bottled-water industry is one of the fastest-growing and least regulated industries in the world, expanding at an annual rate of 20 percent. Last year close to 90 billion liters of bottled water were sold around the world--most of it in nonreusable plastic containers, bringing in profits of $22 billion to this highly polluting industry. Bottled-water companies like Nestlé, Coca-Cola and Pepsi are engaged in a constant search for new water supplies to feed the insatiable appetite of this business. In rural communities all over the world, corporate interests are buying up farmlands, indigenous lands, wilderness tracts and whole water systems, then moving on when sources are depleted. Fierce disputes are being waged in many places over these "water takings," especially in the Third World. As one company explains, water is now "a rationed necessity that may be taken by force."

Corporations are now involved in the construction of massive pipelines to carry fresh water long distances for commercial sale while others are constructing supertankers and giant sealed water bags to transport vast amounts of water across the ocean to paying customers. Says the World Bank, "One way or another, water will soon be moved around the world as oil is now." The mass movement of bulk water could have catalytic environmental impacts. Some proposed projects would reverse the flow of mighty rivers in Canada's north, the environmental impact of which would be greater than China's Three Gorges Dam.

International Trade

At the same time, governments are signing away their control over domestic water supplies to trade agreements such as the North American Free Trade Agreement, its expected successor, the Free Trade Area of the Americas (FTAA), and the World Trade Organization. These global trade institutions effectively give transnational corporations unprecedented access to the freshwater resources of signatory countries. Already, corporations have started to sue governments in order to gain access to domestic water sources and, armed with the protection of these international trade agreements, are setting their sights on the commercialization of water.

Water is listed as a "good" in the WTO and NAFTA, and as an "investment" in NAFTA. It is to be included as a "service" in the upcoming WTO services negotiations (the General Agreement on Trade in Services) and in the FTAA. Under the "National Treatment" provisions of NAFTA and the GATS, signatory governments who privatize municipal water services will be obliged to permit competitive bids from transnational water-service corporations. Similarly, once a permit is granted to a domestic company to export water for commercial purposes, foreign corporations will have the right to set up operations in the host country.

NAFTA contains a provision that requires "proportional sharing" of energy resources now being traded between the signatory countries. This means that the oil and gas resources no longer belong to the country of extraction, but are a shared resource of the continent. For example, under NAFTA, Canada now exports 57 percent of its natural gas to the United States and is not allowed to cut back on these supplies, even to cut fossil fuel production under the Kyoto accord. Under this same provision, if Canada started selling its water to the United States--which President Bush has already said he considers to be part of the United States' continental energy program--the State Department would consider it to be a trade violation if Canada tried to turn off the tap. And under NAFTA's "investor state" Chapter 11 provision, American corporate investors would be allowed to sue Canada for financial losses [see William Greider, "The Right and US Trade Law: Invalidating the 20th Century," October 15, 2001]. Already, a California company is suing the Canadian government for $10.5 billion because the province of British Columbia banned the commercial export of bulk water.

The WTO also opens the door to the commercial export of water by prohibiting the use of export controls for any "good" for any purpose. This means that quotas or bans on the export of water imposed for environmental reasons could be challenged as a form of protectionism. At the December 2001 Qatar ministerial meeting of the WTO, a provision was added to the so-called Doha Text, which requires governments to give up "tariff" and "nontariff" barriers--such as environmental regulations--to environmental services, which include water.

The Case Against Privatization

If all this sounds formidable, it is. But the situation is not without hope. For the fact is, we know how to save the world's water: reclamation of despoiled water systems, drip irrigation over flood irrigation, infrastructure repairs, water conservation, radical changes in production methods and watershed management, just to name a few. Wealthy industrialized countries could supply every person on earth with clean water if they canceled the Third World debt, increased foreign aid payments and placed a tax on financial speculation.

None of this will happen, however, until humanity earmarks water as a global commons and brings the rule of law--local, national and international--to any corporation or government that dares to contaminate it. If we allow the commodification of the world's freshwater supplies, we will lose the capacity to avert the looming water crisis. We will be allowing the emergence of a water elite that will determine the world's water future in its own interest. In such a scenario, water will go to those who can afford it and not to those who need it.

This is not an argument to excuse the poor way in which some governments have treated their water heritage, either squandering it, polluting it or using it for political gain. But the answer to poor nation-state governance is not a nonaccountable transnational corporation but good governance. For governments in poor countries, the rich world's support should go not to profiting from bad water management but from aiding the public sector in every country to do its job.

The commodification of water is wrong--ethically, environmentally and socially. It insures that decisions regarding the allocation of water would center on commercial, not environmental or social justice considerations. Privatization means that the management of water resources is based on principles of scarcity and profit maximization rather than long-term sustainability. Corporations are dependent on increased consumption to generate profits and are much more likely to invest in the use of chemical technology, desalination, marketing and water trading than in conservation.

Depending on desalination technology is a Faustian bargain. It is prohibitively expensive, highly energy intensive--using the very fossil fuels that are contributing to global warming--and produces a lethal byproduct of saline brine that is a major cause of marine pollution when dumped back into the oceans at high temperatures.

A New Water Ethic

The antidote to water commodification is its decommodification. Water must be declared and understood for all time to be the common property of all. In a world where everything is being privatized, citizens must establish clear perimeters around those areas that are sacred to life and necessary for the survival of the planet. Simply, governments must declare that water belongs to the earth and all species and is a fundamental human right. No one has the right to appropriate it for profit. Water must be declared a public trust, and all governments must enact legislation to protect the freshwater resources in their territory. An international legal framework is also desperately needed.

It is strikingly clear that neither governments nor their official global institutions are going to rise to this challenge. This is where civil society comes in. There is no more vital area of concern for our international movement than the world's freshwater crisis. Our entry point is the political question of the ownership of water; we must come together to form a clear and present opposition to the commodification and cartelization of the world's freshwater resources.

Already, a common front of environmentalists, human rights and antipoverty activists, public sector workers, peasants, indigenous peoples and many others from every part of the world has come together to fight for a water-secure future based on the notion that water is part of the public commons. We coordinated strategy at the World Social Forum in Porto Alegre, Brazil, last January. We will be in South Africa for the World Summit on Sustainable Development in September and in Kyoto, Japan, next March, when the World Bank and the UN bring 8,000 people to the Third World Water Forum. There, we will oppose water privatization and promote our own World Water Vision as an alternative to that adopted by the World Bank at the Second World Water Forum in The Hague two years ago. We will stand with local people fighting water privatization in Bolivia, or the construction of a mega-dam in India, or water takings by Perrier in Michigan, but now all of these local struggles will form part of an emerging international movement with a common political vision.

Steps needed for a water-secure future include the adoption of a Treaty Initiative to Share and Protect the Global Water Commons; a guaranteed "water lifeline"--free clean water every day for every person as an inalienable political and social right; national water protection acts to reclaim and preserve freshwater systems; exemptions for water from international trade and investment regimes; an end to World Bank and IMF-enforced water privatizations; and a Global Water Convention that would create an international body of law to protect the world's water heritage based on the twin cornerstones of conservation and equity. A tough challenge indeed. But given the stakes involved, we had better be up to it.

About Maude BarlowMaude Barlow is the chairperson of the Council of Canadians. She serves on the board of the International Forum on Globalization and is the author of Blue Covenant: The Global Water Crisis and the Coming Battle for the Right to Water (New Press). more...

About Tony ClarkeTony Clarke is the director of the Polaris Institute. He serves on the board of the International Forum on Globalization and is the co-author, with Maude Barlow, of Blue Gold: The Fight to Stop the Corporate Theft of the World's Water (The New Press). more...

Since the last update we have had a few interesting items come beforecouncil, all are available on-line if you have a specific issue that youare following. This e-mail is only going to touch on the water issue inan attempt to clearly state the facts.

The water argument over who is to blame goes on 'tit for tat' with theState Govt. The State Government will be selling bulk water to yoursupplier for over $3.50 per kilolitre in ten years time. To put thatinto perspective we currently pay 56c per Kilolitre to the watermanager. This means your buying price for water in ten years could bearound $8.00 per kilolitre compared to the $1.28 you are paying now. WeRCC (Redland City Council) were able to harvest, treat and distributewater for approximately 40c per Kilolitre. Who is responsible, for thenew pricing regime? The text below explains very precisely the impactthe State Govt. water commission has had so far and just how much moreyou will be slugged in the next 10 years. The memo below is designed to explain simply the current circumstances.

CommenceBulk Water Compensation

On the 1st July 2008 Council received a compensation payment of $81.223million from the State Government for $125.193 million of our bulk waterassets (written down value). The initial compensation payment determinedin February this year was $72.93 million.

Since that time we have successfully negotiated an increase on technicalfinancial grounds of $842,847. We have also agreed the final schedule ofassets to be taken over by the State. This resulted in an additional$14.788 million in compensation.

Unfortunately the State has maintained their position to restate thecompensation as at the 30 June 2008 to reflect interest rates at thistime. This has resulted in a reduction of $6.763 million from ourcompensation. The State also reduced our compensation by an amount of$576,000 for leave entitlements of former RCC staff now with the Statewater authorities.

Impact on our Debt Balance

RCCs debt balance (book value) at the 1st July 2007 was $132.705million. During the 2007/08 year we paid $18.166 million off our debt.On the 27th June 2008 we drew down new loans of $14 million as perbudget.

The compensation of $81.222 million from the State was applied to ouroutstanding debt balance on 1st July 2008. This amount reduces themarket value of our debt (without getting too technical, the marketvalue is the amount we would have to pay today to extinguish the totaldebt). We report our debt in terms of book value, and the Statecompensation equates to a reduction of $85.295 million in our bookvalue.

This leaves RCCs total outstanding debt book value as at 1 July 2008after compensation at $43.244 million.

Bulk Water Price

On 27 June 2008, the Queensland Water Commission formally advisedCouncil of the price we will have to pay for bulk water for the next tenyears. The first two years will be through our own water business. From2010/11, the new regional Distribution entity will be buying bulk waterfor RCC residents.

Our buying price for 2008/09 will be 56.2 cents per kilolitre. Thisbuying price will be increased by the QWC in 2009/10 by 23.4% plus a CPIincrease to 71 cents per kilolitre.

In five years (2012/13), RCC residents (through the new regionalDistribution entity) will be paying the State an additional 146% forbulk water over today's prices solely from State increases. When amodest 2.5% CPI increase is applied, this buying price will be 171.5%above today's price.

In ten years (2017/18), all SE Queensland areas will have the samebuying price for water through the Distribution entity. The bulk waterbuying price in 2017/18 will be $3.53 per kilolitre in 2017/18 prices.This figure is a staggering 403% solely from State increases, and 528%when CPI is included, above what we will pay in 2008/09.

Close

Because it is a complex issue that we have been grappling with for thepast few years I thought it was important to set the record straight andput the facts rather than the spin forward. Ray Turner our acting CEOand General Manager of Finance provided the above statement from'Commence to Close' the opening comments and those below are mine.

I am working on a more general e-news letter and should have it readythis week for distribution.Please feel free to forward this e-mail to family and friends who mightbe interested in this issue.If you no longer want to receive this update please reply and ask to beremoved from this service. There will also be additional informationabout this and other issues on my web site. www.peterdowling.net.au

If I can be of further assistance to you, on this, or any other issuedon't hesitate to contact me again.

What is the purpose of this discussion paper?State Water is exploring the possibility of publishing a number of indexes that simply describe how much water is in our storages.

There is a wide range of options for calculating and grouping these indexes.The information provided in this discussion paper is to be read in conjunction with information contained in the relevant Fact Sheets and Frequently Asked Questions (FAQs).

The Sydney Futures Exchange (SFE) is working in collaboration with State Water on the development of these indexes and futures contracts.State Water is now seeking your feedback on three options for these indexes. This will assist us in choosing the best indexes.

What are water indexes?State Water publishes the percentage of storage capacity of each of its 20storages every day. This simple index goes up and down depending on in flowsand storage releases. For example, if Burrendong Storage is half full, thesimple index is 50%.

State Water is proposing new water indexes that combine a number of storages. These new indexes would range between 0% and 100% of theactive storage capacity.

Further, these water indexes can be weighted and seasonally corrected,allowing for more informed interpretation of the state of a valley ora group of valleys.

HOUSEHOLD water prices across Melbourne will soar by up to 97 per cent by 2013. Water Minister Tim Holding said today the average householder would pay between $1.30 and $1.45 more for water per week from July next year.

Acording to plans submitted by water retailers, prices need to increase dramatically over the next four years to pay for key water infrastructure projects.

Yarra Valley Water is seeking to increase annual household bills from $510 to 1,005 by 2013, a 96.7 per cent rise.

City West Water is proposing average bills increase from $492 to $920 by 2012-13, an increase of 87 per cent.

South-East Water is seeking an 18 per cent increase next financial year, followed by annual increases of 16 per cent, 12 per cent and 11 per cent.

``We've been quite up front about this, we've said you can't have a record investment in vitally important water infrastructure projects without paying for it,'' Mr Holding said.

``And we've said the state Government will make contributions in some cases, but in the case of Melbourne's projects in particular, that Melbourne water users will have to pay more.''

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WeAreChange BrisbaneI hold personal views, beliefs and opinions that do not necessarily reflect the beliefs and opinions of WeAreChange Brisbane as a whole.

Europe Seeks Moratorium to Protect Public Water from Privatization PushBy Olivier Hoedeman, Corporate Europe ObservatoryPosted on November 1, 2008, Printed on November 10, 2008http://www.alternet.org/story/105465/

The first-ever pan-European civil society coalition against water privatisation was launched last week during the European Social Forum in the Swedish city Malmö. Including citizens groups from Italy, Germany, France, Spain, Turkey and a dozen other countries across Europe, the European Network for Public Water will insist on major changes in EU policies towards water management, away from the current pro-privatisation approach.

The pressure towards liberalising water services, which in most European countries are still primarily or exclusively in public hands, to a large extent stems from the European Commission. While officially required to take a neutral stance on public versus private management, the Commission seems determined to find ways to transform the water sector in Europe by exposing it to "competition" via public tendering.

An ambitious attempt by the European Commission to get water delivery included under Single Market rules was rejected by the European Parliament in 2004, but this has by no means ended the Commission's pressure for liberalizing the sector. The most recent example is the infringement procedure launched by the Commission in spring 2008 against Italian municipalities that have jointly organised their public water services in a multi-municipal consortium.

The Commission claims this cannot be considered 'in-house' public management and thus violates EU procurement law. The water services of these Italian cities, the Commission argues, must be offered for competitive bidding, which means allowing private water corporations to bid for the contract.

In fact, the multi-municipal consortium used by the Italian cities is an entirely legitimate and increasingly popular model of organizing public water services, due to its potential to benefit from scale-advantages. This model is widely used, for instance in The Netherlands, France, Germany and Sweden. The Commission's infringement procedure is therefore a serious threat to public water delivery in Europe.

The Commission's approach is essentially ideology-driven, based on flawed assumptions about the superiority of the private sector in service delivery as well as a misguided belief in the universal applicability of "competition." Reality shows that public utilities often perform far better than private water operators when it comes to water quality, low leakage and tariff levels and overall sustainability.

Even in France, the heartland of water privatization, there is a growing understanding of the advantages of public water supply. Earlier this year the Mayor of Paris made a historical decision to end the city's decades-long contracts with two private operators and instead develop an integrated public water and sanitation system.

It is high time for EU policy-makers to abandon short-sighted privatisation policies and instead pay close attention to the lessons that can be learned from Europe's many world class public utilities. Cities such as Amsterdam, Seville, Vienna and Grenoble have developed highly effective, environmentally sustainable and socially responsible public water management.

The first step towards a new approach that builds on the strength of Europe's public water sector is to introduce a moratorium on new EU liberalisation initiatives in the water sector and clear guarantees that public water supply is exempted from EU competition and procurement rules.

Olivier Hoedeman (Corporate Europe Observatory) is a member of the steering group of the European Network for Public Water.

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That men do not learn very much from the lessons of history is the most important of all the lessons of history.~Aldous Huxley

He who has a why to live can bear almost any how. - ~Friedrich Nietzsche

Water is the new oil for global financial powerhouses and water is being commoditized and traded in global stock exchanges.

Today in addition to being able to buy water rights and purchase lakes on private land, an individual or a corporation can invest in water-targeted hedge funds, index funds and exchange-traded funds (EFTs), water certificates, shares of water engineering and technology companies, shares of multinational private water utilities, shares of multinational banks and investment banks that own water companies, and a host of other newfangled water investments in this U.S.$425 billion industry which is expected to become a U.S.$1 trillion industry within five years. And if one happens to be a tycoon, one can also create his or her own private water districts and water utilities.

The recent media coverage on water has centered on individual corporations and super-investors seeking to control water by buying up water rights and water utilities. But paradoxically the hidden story is a far more complicated one. The real story of the global water sector is a convoluted one involving "interlocking globalized capital": Wall Street and global investment firms, banks, and other elite private-equity firms -- often transcending national boundaries to partner with each other, with banks and hedge funds, with technology corporations and insurance giants, with regional public-sector pension funds, and with sovereign wealth funds -- are moving rapidly into the water sector to buy up not only water rights and water-treatment technologies, but also to privatize public water utilities and infrastructure.

"Water" and "water sector" are used broadly to refer to water rights (i.e., the right to tap groundwater, aquifers, and rivers), land with bodies of water on it or under it (i.e., lakes, ponds, and natural springs on the surface, or groundwater underneath), water-purification and treatment technologies (e.g., desalination, treatment chemicals and equipment), irrigation and well-drilling technologies, water and sanitation services and utilities, water infrastructure maintenance and construction (from pipes and distribution to all scales of treatment plants for residential, commercial, industrial, and municipal uses), water engineering services (e.g., those involved in the design and construction of water-related facilities), and retail water sector (such as those involved in the production, operation, and sales of bottled water, water vending machines, bottled water subscription and delivery services, water trucks, and water tankers).

The story is multifaceted: In the midst of a recessionary economy with a blistering financial and economic crisis, declining employment, and a shrinking tax base, many financially strapped and debt-ridden local governments are beginning to relinquish public infrastructure (including water) and municipal services (including water and sewage utilities) to privatization by Wall Street and other global investors.

At the same time, Wall Street and multinational banks are seeing water, food, energy, and public infrastructure as safe investment havens with stable returns and financially liquid assets. Simultaneously, they are waking up to the golden opportunity presented by the current reality of a thirstier, water-scarcer world caused by global climate change (and its extreme weather), rapidly depleting groundwater and aquifers, increasing water pollution, soaring water demand exerted by population increases, fast-rising agricultural and industrial uses, and crumbling water infrastructure worldwide requiring billions of dollars annually in maintenance and upgrade.

Often, the picture painted by mainstream media and water-rights activists is too simple -- that of a single corporation (such as Coca-Cola in India or Bechtel in Bolivia) "corporatizing water;" the real story is not just of flamboyant tycoons (such as U.S.'s billionaire and former oil tycoon T. Boone Pickens, or more recently, Hong Kong's real-estate billionaire Li Kai-shing, or Britain's magnate Vincent Tchenguiz) single-handedly grabbing water rights or individual corporations (e.g., Coca-Cola and Nestlé) sucking dry springs and groundwater to the detriment of poor subsistence farmers or slum-dwellers, but vastly complex global networks and partnerships of investment banks and private-equity firms linking together with other institutions (such as public-sector pension funds in Australia, Canada, and Europe; and sovereign wealth funds in the Middle East and Asia) and multinational corporations elsewhere to buy up and control water worldwide.

Not only are individual corporations buying up water but a deluge of globalized capital are also rapidly buying up water and consolidating their foothold in the water sector; these capital entities are investment powerhouses such as Goldman Sachs, JPMorgan Chase, Merrill Lynch (before it was sold to Bank of America), Citigroup, Morgan Stanley, Deutsche Bank, Credit Suisse, Macquarie Bank, Allianz SE, UBS AG, HSBC Bank, Alinda Capital, The Carlyle Group, Barclays Bank, Nomura Holdings, and many others. In fact, Wall Street and their global banking and corporate partners are aggressively buying up water all over the world.

Given this recent liquid-gold rush by private (also several public pension-funds) capital, it will be extremely difficult for environmental activists and human rights advocates who called water a basic human right and a public good which should be under public control to reverse this privatization trend. Naturally, when governments are financially strained by revenue shortfalls and tightening municipal-bond markets, calls for privatization of existing public infrastructure and utilities will be louder and harder to resist.

These banks and investment funds are aggressively entering the water sector, and they have raised billions of dollars for their water and infrastructure specialty investment funds (i.e., index funds, hedge funds) -- and they can recruit more money (in euro, pound sterling, dollar, RMB/yuan, yen, Australian or Canadian dollar, and whatever currency needed) within a short period of time from anywhere in the world, transcending all boundaries (whether national, ideological, political, linguistic, religious).

All this water-market reshaping is occurring in the midst of a global frenzy over privatization of public infrastructure -- considered to be low-risk investments -- such as roads, bridges, tunnels, ports, airports, gas, and water and sewage treatment. Water is one of the critical infrastructures, and Wall Street knows it. For Wall Street and global capital, water is also so much more -- it is the new petroleum of this century, an essential commodity to be invested, owned, controlled, and speculated upon to maximize profit.

Unfortunately, for water users everywhere, a likely consequence of Wall Street and multinational corporations' ownership and control of water in the midst of a global financial and economic crisis is that they will attempt to recapture their massive losses in their risky investments in the financial and housing/real estate sectors and elsewhere at the expense of water users.

For example, U.K. water customers are being squeezed by their private water utilities, to the tune of 17.5 percent to 62.2 percent increases in water rates, and could be paying as much as £1,000 in annual water bill per household within five years. Predictably, when Merrill Lynch boasts that its ML China Water Index yields a 102.2 percent returns, outperforming the benchmark by 70.7 percent during a 12-month period from 2006 to 2007, other multinational banks will also rush to invest in the water sector because they see it as a haven with rich rewards and expect these stratospheric returns. One possible outcome is the squeezing of water end-users.

Private water utilities are monopolies and they are able to set prices at will (or exert monopolistic pricing) due to a lack of competition and governmental regulations. Additionally, water itself is an essential good without a substitute; demand for water is also inelastic relative to price: regardless of its cost, one must have minimal amount of freshwater for maintaining daily life -- for drinking, washing and hygiene, crop production, and food preparation. (Goldman Sachs sees water consumption doubling every 20 years.)

If the history of U.K.'s water privatization is a guide, then water users all over the world -- not just households, but also businesses, industries, and agriculture -- are in serious trouble because they will be held hostage to high prices exerted by the monopolistic private water corporations and water utilities, many of which are owned by multinational banks and investment banks, and in turn these banking institutions have their shareholders, private investors, and even public pension funds demanding and expecting high returns on their water investments.

Water is more important than oil: it takes some 1,800 gallons to produce a barrel of crude oil, some 4,000 liters of water to produce a liter of ethanol, and 900 liters of water to make a liter of biodiesel. Several people have already made the statement about water being the new oil of the 21st century; recognizing its importance, Wall Street has rushed into global water markets to cash in on this liquid gold. The former heads of state, United Nations chiefs, CIA and Pentagon analysts, CEOs, tycoons, analysts with the world's largest investment banks and private-equity firms, and oil companies' executives have agreed on this.

Multinational and Wall Street banks and investment banks often disguise their investment in the water sector as a part of the so-called green, sustainable, environmentally friendly, socially responsible, clean-technology, climate friendly or global warming-reducing investments. They see "rich rewards" in water and infrastructure: Indeed, the European Union requires an investment of between U.S.$150 billion to U.S.$215 billion in sanitation infrastructure; more than U.S.$700 billion (incidentally, this is also the amount just given to bail out Wall Street) is needed to maintain and upgrade its water and sanitation infrastructure in the next 20 years. In Australia, an estimated AUD$5 billion is needed just to replace aging water assets in cities over the next five years and that AUD$30 billion is required to build new water infrastructure in the next decade.

Emerging economies such as China and India also have such serious water shortages and pollution problems that they both require at least a trillion dollars of investment to solve their respective water problems. Water-sector investment opportunities are also immense in Mexico, Egypt, the Middle East, Brazil, several African countries, and many other water-stressed nations.

Why Water Is the "Petroleum for the 21st Century"

Only 2.5 percent of the earth's water is freshwater -- and of that 2.5 percent, 70 percent is locked in the glaciers, ice caps, and aquifers, so less than 1 percent of world's freshwater (or 0.007 percent of world's water) is accessible and potable for humanity, to be shared by the world's 6.7 billion people, the myriads of wildlife and ecosystems, and humans' agriculture and industries.

Back in 2001, the CIA had already estimated that by 2015, almost half of the world's population will live in water-stressed countries. Worldwide, 1.1 billion people lack adequate water and 2.6 billion people don't have adequate sanitation. By 2025, the United Nations forecast that 3 billion people will lack clean water. The Organization for Economic Corporation & Development (OECD) predicts that nearly 50 percent of the world's population will face severe water shortages by 2030. In China, some 360 out of 600 cities are facing water shortages, with 100 facing severe shortages, according to China Institute for Geo-Environment Monitoring. The first person to serve as China's Minister of State Environmental Protection Agency, Qu Geping, said, "The ideal population for China's limited water resources is no more than 650 million people." China's population is 1.3 million in 2008.

Water is often dubbed "the new oil" because of its similarity to oil: diminishing supplies and rapidly growing demand worldwide. The world has already seen many oil wars in the 20th century over supposed dwindling supplies of natural commodities and resources. This century, the world has already witnessed the genocide in Darfur, which was initially brought about by climate-induced droughts and desertification lasting more than 20 years (since the 1980s), which led to tribal competition over water and grazing land between Arab nomads and black African farmers; these small-scale resource conflicts eventually exploded into a full-blown genocide backed by a racist, genocidal ideology.

Indeed, lobbying group Justice Africa told BBC in July 2007 that "the root cause of the conflict is resources -- drought and desertification in North Darfur." In June 2007, UN Environmental Programme (UNEP) said that peace in Darfur is nearly impossible unless the issues of environmental destruction were addressed.

Water is the basis of agriculture -- not just in growing food, but also in processing food. Water is the foundation of modern cities and urban sanitation systems -- from our indoor plumbing to centralized wastewater-treatment plants. Water is the basis of industries and manufacturing. Water is also used to generate electricity. Water sustains nature and wildlife. In essence, humanity can live without oil -- albeit more primitively -- but humanity cannot survive without water.

Simply put, without water, there's no agriculture and food production, no industries, no viable ecosystems, and no life. Major multinational banks and corporations around the world are waking up to the reality of water's emerging scarcity, which can disrupt national economies and lead to social and political chaos. In the midst of global climate change which brings extreme droughts and in the midst of a chaotic global financial and economic environment, water is a commodity likened to gold: it is liquid gold that sustains life. Hence, in the recent few years we have witnessed a mad rush by Wall Street and multinational banks and super-investors elsewhere to buy up and control this commodity.

In the past few years, multinational and Wall Street investment firms and banks have launched water-targeted investment funds. Several well-known specialized water funds include Pictet Water Fund, SAM Sustainable Water Fund, Sarasin Sustainable Water Fund, Swisscanto Equity Fund Water, and Tareno Waterfund. Several structured water products offered by major investment banks include ABN Amro Water Stocks Index Certificate, BKB Water Basket, ZKB Sustainable Basket Water, Wagelin Water Shares Certificate, UBS Water Strategy Certificate, and Certificate on Vontobel Water Index. There are also several water indexes and index funds, as follows:

One often-heard reason for the investment banks' rush to control of water is that, "Utilities are viewed as relatively safe assets in an economic downturn so [they] are more isolated than most from the global credit crunch, initially sparked by concerns over U.S. subprime mortgages," according to a 2007 Reuters article. A London-based analyst at HSBC Securities told Bloomberg News that water is a good investment because, "You're buying something that's inflation proof and there's no threat to earnings really. It's very stable and you can sell it any time you want.''

The Coming Tidal Wave of Privatization of Public Infrastructure and Municipal Services

Privatization of public infrastructure -- including water utilities -- has been gaining more mainstream media scrutiny recently. For example, the New York Times recently reported on cities debating the issue of privatization of public infrastructure: Wall Street investment banks and investors -- such as Goldman Sachs, Morgan Stanley, Credit Suisse, Kohlberg Kravis Roberts, and the Carlyle Group -- are amassing an estimated U.S.$250 billion "war chest -- much of it raised in the last two year -- to finance a tidal wave of infrastructure projects in the United States and overseas," the New York Times reported.

As the New York Times pointed out correctly, U.S. federal, state, and local governments are financially strained with "mounting deficits that have curbed their ability to improve crumbling roads, bridges and even airports with taxpayer money," hence both the voting public and the governments are increasingly open to the idea of privatizing public infrastructure; the crumbling infrastructure is estimated to require at least U.S.$1.6 trillion investment in the next five years to maintain and upgrade according to the American Society of Civil Engineers.

Currently, approximately 8 percent of water utilities worldwide are in private hands; this figure is expected to double by 2015, according to several investment-banking analysts. As for water corporations (e.g., those in technology and engineering, materials and equipment, vending and private distribution via water trucks), all are in private hands. According to data compiled by Bloomberg, the rate of infrastructure privatization for all types of infrastructure almost doubled to U.S.$340 billion between 2005 and 2007.

The New York Times also reported that many cities suffering severe financial strains after having been shut out of the municipal bond markets are cutting back infrastructure upgrade and maintenance projects. Cities are also facing revenue shortfalls attributable to unprecedented housing foreclosures (shrinking property-tax base), decreased employment base, dwindling sales taxes, and reduced funding from state and federal governments. For example, Athens-Clarke County in Georgia delayed a U.S.$221 million bond issue for upgrading its three sewage-treatment plants after Lehman Brothers filed for bankruptcy.

Given the current state of economy in the United States and elsewhere in the world, we can expect more municipal infrastructure and services privatization. Goldman Sachs, Citigroup, the Carlyle Group, AIG Highstar Capital, Credit Suisse (also partnering with GE), UBS AG, JPMorgan Chase, Deutsche Bank, and other multinational banks are amassing "war chests" of several billions of dollars in anticipation of this "tidal wave" of infrastructure (including water) privatization around the world.

Jo-Shing Yang is the author of Ecological Planning, Design, & Engineering, Solving Global Water Crises: New Paradigms in Wastewater and Water Treatment, Small and On-Site Systems for Water Self-Sufficiency and Sustainability and can be reached at jsyang@alum.mit.edu.

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That men do not learn very much from the lessons of history is the most important of all the lessons of history.~Aldous Huxley

He who has a why to live can bear almost any how. - ~Friedrich Nietzsche

Though the World Bank may be changing its formerly dogmatic approach to full privatisation of the water sector, key cases in Tanzania, Armenia, Zambia and India highlight that the Bank may not be learning quickly enough and that the poor may be left both without improved water and paying for botched privatisations.

At Water Week in Washington in May, Bank vice president Kathy Sierra asserted that privatisation was not "the only answer"-- there was the full spectrum of public-private mix of investments instead. Only a few days earlier, a senior World Bank official, Shekhar Shah, reported in New Delhi how the Bank had "learned the hard way" that it was not correct to leave it to the private sector.

But the statement by Lars Thunell, head of the Bank's private-sector arm the International Finance Corporation (IFC), at World Water Week in Stockholm in August shows that the Bank is still not interested in pursuing public solutions to water provision: "We believe that providing clean water and sanitation services is a real business opportunity."

Currently the IFC's focus is on creating the right conditions for private investors, including a $100 million fund, called IFC Infraventures, to "provide risk capital for early stage development of infrastructure projects in the poorest countries, but also to encourage more public-private partnerships." Thunell also claimed: "The debate is shifting. Instead of 'should the private sector be involved in water?' the question is 'how can we work together for sensible and fair solutions?'"

Tanzanians' nightmare

A fair solution has still not been reached in Tanzania, where the Bank-supported privatisation of water services resulted in sharply higher water prices, little improvement in supply and the eventual termination of the contract with UK-based multinational Biwater in 2005 (see Update 55, 46). In August this year, the Bank's International Center for the Settlement of Investment Disputes (ICSID) issued its ruling in Biwater's lawsuit against Tanzania, and found that while technical breaches of Biwater's investors' rights did occur, Biwater was not entitled to compensation because the breaches were worth zero in monetary value and the termination of the contract was inevitable.

"The Tanzanian water privatisation project was a scandal right from the beginning," said Vicky Cann of the World Development Movement. "It is absolutely right that this Court has found that Tanzania owes Biwater nothing, but shocking that Biwater saw fit to drag the government of such a poor country through the courts in the first place."

Even though the ICSID has refused Biwater's claim to compensation, the Tanzanian people will have to carry the financial burden of $140 million loan without benefiting from improvement in their water sector. The lawyer who defended the Tanzanian government suggested that the World Bank should pay reparations to Tanzania as "the whole affair was the prescription of the World Bank. It will be fair that they should pay the government".

At the very least, as Mussa Billengeya from the Tanzanian Association of NGOs said, "The failure of this policy should be a lesson to the World Bank, aid donors, and governments that privatisation is not a solution for problems in developing countries. In fact, this failure has added a burden to a country that is already struggling to reach its international poverty target on access to water."

Armenia water corruption

In August US-based NGO Government Accountability Project (GAP) released a new report investigating the corruption allegations facing the water privatisation project in Armenia's capital Yerevan (see Update 57).

Armenia borrowed from the World Bank in 1998 to restore the Yerevan water utility, with water-sector multinational ACEA eventually winning the contract to take control of the facility. During the course of the first two years, complaints about unreliable service and contaminated water increased, and the exclusion of local vendors from ACEA tenders led to allegations of corruption.

The GAP report validates the finding of an Armenian parliamentary commission set up to investigate the project in 2004. The parliamentary study revealed that the representative of the international operator ACEA, in collaboration with corrupt state officials, had diverted project materials and equipment to commercial enterprises for personal gain. The study also showed that costly improvements to the systems had been abandoned and replaced by improper for-profit schemes and that the representative of the international operator had used his position to establish a network for the purpose of embezzling public funds.

In 2007, the Commission sought advice from GAP after the Bank failed to investigate the allegations. GAP has been equally unsuccessful in getting the Bank's Department for Institutional Integrity to investigate what seems to be a flagrant case of project-related corruption. The Bank may be unwilling to take its share of responsibility to redress the harm done or compensate citizens who have lost millions in public funds.

Upfront investment needed

Privatisation and commercialisation of water in the developing world has suffered - and still does - from several flaws. Companies that took over contracts for water management soon realised the lack of short-term profitability of a sector that required large investment. Unable to fully offset their costs, the companies failed to invest with negative effects on citizens who faced increases in tariffs and declines in access. Often governments could not supervise company performance or hold them accountable as proper regulatory frameworks were not in place.

In a policy brief released by the UNDP-sponsored International Poverty Centre in June, academics Hulya Dagdeviren and Degol Hailu conclude that "So far, Zambia's liberalisation strategy has emphasised tariff rationalisation. This has failed to ensure full cost recovery and has further constrained affordability and accessibility. The correct policy prescription is up-front public investment to renew and extend infrastructure."

So why has the Bank not warmed to this policy prescription? A new book analyzing the Bank's water privatisation agenda in India from Indian NGO Manthan Adhyayan Kendra blames the Bank's structures for producing knowledge (see Update 54, 53). Author Shripad Dharmadhikary writes: "the Bank's process of generating knowledge is flawed and exclusionary. It excludes common people, and their traditional expertise and knowledge. The Bank's knowledge is frequently created by highly paid, often international, consultants, who have little knowledge of local conditions. The knowledge creation is mostly directed towards arriving at a pre-determined set of policies - privatisation and globalisation. This knowledge creation is often selective, in that information, evidence or experiences that do not support these pre-determined outcomes are ignored."

Based on case studies of the Indian water sector review in 1998, the Bank-support Public-Private Infrastructure Advisory Facility (see Update 56), water privatisation in Delhi, and a project for water restructuring in the Indian state of Madhya Pradesh, Dharmadhikary finds that "[the Bank's] policies have cut people's access to water, led to environmental destruction, resulted in displacement and destitution of people, stifled better options for water resource management, have had huge opportunity costs, and privileged corporate profits over social responsibility and equity."Remunicipalisation wave

Though the World Bank seems to be unwilling to counsel countries on how to reform public services, developing countries looking for advice can now use a new web site on the de-privatisation of water services. The so-called water remunicipalisation tracker provides information on different cities globally that have successfully taken back public control over water. It is a participatory initiative to which global activists can contribute.

The site, promoted by European NGOs Corporate Europe Observatory and Transnational Institute, says "It's apparent that a global remunicipalisation wave is emerging." It indicates that "Approaches differ depending on local circumstances but undoubtedly lessons can be learned from the different but inspiring experiences of remunicipalisation." That seems to be more than the Bank is willing to offer.Eurodad is the European Network on Debt and Development.

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That men do not learn very much from the lessons of history is the most important of all the lessons of history.~Aldous Huxley

He who has a why to live can bear almost any how. - ~Friedrich Nietzsche

MELBURNIANS could soon be subject to tough new daily water limits under a State Government plan to curb use.

We are at Stage 3a right mow and heading for the next level. The bloody water catchments are in the wrong places and I am sure there is bribery and corruption going on with the shires that have the main reservoirs.

Quote

Due to ongoing dry weather, Stage 3a water restrictions have been in effect since 1 April 2007.

In the Indian state of Rajasthsan, farmers have accused Coca-Cola factories of drawing too heavily on the area's water supplies and contributing to pollution. Fred de Sam Lazaro reports on the controversy and the claims of both the company and its critics.

GWEN IFILL: Next, the battle between Coca-Cola and farmers over the shrinking supply of available water in India. NewsHour special correspondent Fred de Sam Lazaro has our report from the state of Rajasthan.

FRED DE SAM LAZARO, NewsHour Correspondent: This is one of 49 factories that make Coca-Cola drinks across India. The company has invested over $1 billion dollars building a market for its products in this country, but Coca-Cola's welcome has been less than effervescent, particularly around this factory in Kala Dera, in the arid and recently drought-stricken state of Rajasthan.

The plant used about 900,000 liters of water last year, about a third of it for the soft drinks, the rest to clean bottles and machinery. It is drawn from wells at the plant but also from aquifers Coca-Cola shares with neighboring farmers. The water is virtually free to all users.

These farmers say their problems began after the Coca-Cola factory arrived in 1999.

RAMESHWAR PRASAD, Farmer (through translator): Before, the water level was descending by about one foot per year. Now it's 10 feet every year. We have a 3.5-horsepower motor. We cannot cope. They have a 50-horsepower pump.

RAM SAPAT, Farmer (through translator): Every day, a thousand vehicles come out of that factory taking away our water. What is left for our kids?

FRED DE SAM LAZARO: To irrigate their fields of barley, millet and peanuts, these growers complain they must now drill deeper and use heftier pumps to water their fields.

MANGAL CHAND YADAV, Farmer (through translator): I've had to drill three times. It's down to 260 feet. Five years ago, it was 180 feet.

HARI MICHAN YOGI, Farmer (through translator): It's because everyone has a submersible pump now, the Coca-Cola factory. There's not enough rain. These are the reasons.

Environmentalists' claims

FRED DE SAM LAZARO: Their cause was picked up by activists, like Rajendra Singh. He has worked across the region helping villagers conserve and collect rainwater through traditional methods.

RAJENDRA SINGH, Water Activist (through translator): Exploitation, pollution, encroachment, Coca-Cola is doing all three. That's why I say that no company has the right to steal the common water resource. No company has the right to pollute water that is our life. No company has the right to encroach on our land that is our livelihood. Coca-Cola is doing all three.

FRED DE SAM LAZARO: The farmers also got the attention of international activists, according to Siddharth Varadarajan, an editor with the newspaper The Hindu.

SIDDHARTH VARADARAJAN, Newspaper Editor: Activist groups have been quite effective and have managed to tap into anti-globalization and environmental and green groups across the world and have, you know, therefore, I think, managed to put Coke on the defensive internationally, to a much greater extent than has happened within India.

FRED DE SAM LAZARO: In 2005, when the University of Michigan banned Coke products, the company responded, and the ban was then lifted.

Coca-Cola agreed to an independent third-party assessment of some of its operations in India. That report determined that this plant in Rajasthan is contributing to a worsening water situation. It recommended that the company bring water in from outside the area or shut the factory down. Coca-Cola rejected that recommendation.

Already in 2004, Coca-Cola shut down one factory in south India amid a similar controversy. Its response now doesn't surprise Varadarajan.

SIDDHARTH VARADARAJAN: Clearly, if Coke were to give in one factory, as other communities essentially look at the experience of Rajasthan, it's quite likely that there would be a cascading effect. So I suspect Coke will dig its heels in.

The company's viewpoint

FRED DE SAM LAZARO: For his part, Coca-Cola's India head, Atul Singh, says it would be irresponsible to leave.

ATUL SINGH, President, Coca-Cola India: You know, walking away is the easiest thing we can do. That's not going to help that community build sustainability.

FRED DE SAM LAZARO: So Coca-Cola, while insisting its impact on the water supply was minimal, said it would stay and help.

The company has agreed to subsidize one-third of the cost of water-efficient drip irrigation systems for 15 neighboring farmers. The government pays most of the rest; growers themselves must chip in 10 percent.

Coca-Cola has also set up concrete collection systems for rainwater. Typically about 70 percent of rainfall evaporates before it can seep into the ground. Water collected from rooftops is piped into shafts up to 150 feet deep. Despite drought conditions, the system has been a success, according to company spokesman Kalyan Ranjan.

KALYAN RANJAN, Coca-Cola Spokesman: We have still managed to recharge banks than what we withdraw, so what we see ourselves is we are part of a problem-solving mechanism rather than a problem in ourselves.

FRED DE SAM LAZARO: Are you saying you're putting back more water than you're taking?

KALYAN RANJAN: In Kala Dera, yes. In Kala Dera, yes.

FRED DE SAM LAZARO: The scientist who conducted the independent study of Coca-Cola's operations is not ready to accept that claim. Dr. Leena Srivastava is with the Delhi-based Energy and Resources Institute.

LEENA SRIVASTAVA, Scientist: We haven't been able to prove that. And it's too short a timeframe to start talking about whether groundwater aquifers have been recharged in six months. I think we really have to wait and watch and see what the impact is.

FRED DE SAM LAZARO: And farmers and activists, like Rajendra Singh, remain skeptical.

RAJENDRA SINGH (through translator): They have an arrogance that says, "We have money; we can buy what we want."

FRED DE SAM LAZARO: They also are critical of the government locally for attracting Coca-Cola to a water-scarce region and nationally for ignoring water policy in a rush to attract industry and foreign investment. Editor Varadarajan says they have a point.

SIDDHARTH VARADARAJAN: India has a completely irrational groundwater management policy, where, if you have the means and the resources, you can extract as much groundwater as you like and you can use this water which you essentially pump up for free -- it's unmetered -- to manufacture products which you can sell for a high price, whether it's bottled water, whether it's a beverage, whether it's industry.

And, you know, this is something which the Indian policymakers have simply not bothered to formulate a cohesive strategy to deal with.

LEENA SRIVASTAVA: We are heading very rapidly towards the situation of absolute scarcity. Without even adding on the problems that might come up because of climate change issues, we just don't have enough. And food security in the future can become a major problem for the country.

FRED DE SAM LAZARO: Food security?

LEENA SRIVASTAVA: Food security, yes.

FRED DE SAM LAZARO: Based on the water scarcity?

LEENA SRIVASTAVA: Based on water scarcity.

FRED DE SAM LAZARO: In June, India's prime minister proposed a series of measures to address broader climate change issues, including water. As for Coca-Cola, CEO Singh says, by the end of 2009, the company will become, quote, "water-neutral," returning at least as much groundwater as it withdraws in India overall, though not necessarily at individual plants like Kala Dera.

He says it's part of an emerging sense of corporate social responsibility.

ATUL SINGH: You know, I think the world has changed. If you'd asked me this question 10, 15, 20 years ago, I would give you a different answer.

Today, what I have seen -- and this is globally, as well as in India -- corporates have moved from philanthropy -- you know, cutting a check for the art, you know, some art museum or some religious temple or, you know, helping a particular foundation -- into real sustainability.

Are we building sustainable communities? And if we are not, consumers will choose products and services from companies who do behave in that manner.

FRED DE SAM LAZARO: He says Coca-Cola plans to invest several hundred million more dollars in the years ahead in what may soon become its largest market.

Bottled water is a hot commodity -- Americans drank almost 9 billion gallons of it last year. But some Maine residents think less of it should come from their state. They are challenging Poland Spring over rights to the state's spring water aquifers. Tom Bearden reports.

RALLY SPEAKER: Are you fired up? Yes, that's what I'm talking about.

TOM BEARDEN, NewsHour correspondent: Bottled water might be popular with those Americans who drank almost 9 billion gallons of it last year. But this crowd says no more of it should be coming from Maine.

RALLY SPEAKER: Whose water is it?

CROWD: Ours!

RALLY SPEAKER: Whose water is it?

CROWD: Ours!

TOM BEARDEN: Maine is home to one of the best-selling brands of water in the country, Poland Spring: 700 million gallons of it get put into bottles every year. The protestors insist they should have some say about how much Poland Spring is allowed to pump and where.

MAINE RESIDENT: You can't just have a meeting with 20 people here.

TOM BEARDEN: When most of them were not allowed into a Water Board meeting in Kennebunk, they said it was typical of how such deals are made: without enough public input.

MAINE RESIDENT: You should not advertise it as a meeting for the public and then have a private, closed meeting.

TOM BEARDEN: The few who were let in argued against a 30-year deal the board was going to make with Poland Spring, which is owned by Nestle Waters, a large multinational corporation.

MAINE RESIDENT: You live here, and you're responsible to us, not to this corporation, and you cannot violate your public trust. So don't do it. Don't make a bad decision. You will live to regret it, I promise you.

TOM BRENNAN, senior natural resource manager, Poland Spring: In the years that Nestle has owned the Poland Spring brand, Nestle's invested $430-odd million in the economy of the state. And for a state like Maine, that's a very substantial contribution.

LYING on the chiropractor's table the other day, I got to thinking about how life has changed around Bendigo after many years of harsh water restrictions.

For a start, there's the monthly visit to try to get my poor bucket-carrying skeleton back into some sort of shape for another four weeks of bailing out the bath and pouring it on to the plants in the most distress.

Living with water restrictions can be a real pain in the back.

Tim Holding says Melbourne people are using an average of 165 litres per head per day now, and that will rise to about 180 litres in summer.

For country people, that's best measured as a whopping 20 buckets a day. And I have to think: what? Every day?

To those of us living in northern Victoria, this seems like a massive amount.

If you'll excuse the pun, Melbourne people should just suck it up and get on with living in their environment.

On a rough calculation, we use about 90 litres a day per head in our house, of which about 70 are recycled back on to the garden. In some towns, even that sounds like a luxury.

Many country people visiting friends and family in Melbourne say they find the green lawns and nature strips almost bizarre and a source of deep annoyance, we have become so used to tight restrictions.

Here, a green nature strip is cause for suspicion. It's amazing how many Bendigo homes have little signs out the front proclaiming their struggling patches of green are served by recycled water or tank water. Not to do so risks being dobbed in.

We are now under a modified stage 4, and have been for a couple of years. It allows us to dribble some water on the garden for one hour twice a week. To us, even that's a bit of a luxury, for the summers before that all outdoor water use was banned.

Chiropractic work boomed in Bendigo then.

The truth is, learning to live in a dry climate with harsh restrictions does have some satisfactions. We have a large garden on a hill in the centre of town.

When we bought it eight years ago, it was surrounded by three-quarters of an acre of beautiful English-style gardens and what seemed about 4000km of polypipe watering system.

Oh, it was a treat: turn on the timer and tap and the place turned into a Bendigo version of Waterworld.

That lasted about one year.

The rains failed. The dams dried up and in came the restrictions.

After two years, the polypipe became nothing more than a nuisance.

The dogs began ripping it up and chewing it. Spiders and beetles moved in. But we did what thousands of others are doing around regional Australia.

We began transforming our garden into a dry climate place.

Each year we uproot another few hundred metres of polypipe, chop it up and put it in the bin.

It's nearly all gone now.

Each year we rip out the things which did not survive (the silver birches died on Dry Year One) and propagate the survivors.

It takes work and discipline and we are watching with enormous interest as our garden gradually becomes one my nana would recognise.

It has old roses, lavender, geraniums, pelargoniums, succulents, rock features, gravel paths and lots of mulch.

The tragic thing is that when you walk around some of the older areas of Bendigo, it is clear some home owners have lost all heart.

Their homes sit like boxes in bland rectangles of dead grass and desiccated dirt.

Others have spread gravel where lawns used to be.

One neighbour has even put down that bright green plastic turf.

We have saved the trees by re-using grey water and we are increasingly proud of what the garden is becoming.

We actually think our 13,000 litre rain tank is quite sculptural and the vegies it allows us to grow are delicious.

The grey-water hose poking out the laundry window is a Bendigo badge of honour. At present we're allowed to water our gardens for one hour, twice a week, which makes us a lot luckier than some other parts of northern Victoria.

I'm not sure if I would ever want to return to the days when we would be allowed to splosh 155 litres of water around every day, like Melburnians.

Or to be able to use the hose for two hours twice a week.

It would seem sinful.

Although I wouldn't miss the Bucketer's Back.

Linda Barrow is Bendigo-based writer and gardener

Logged

WeAreChange BrisbaneI hold personal views, beliefs and opinions that do not necessarily reflect the beliefs and opinions of WeAreChange Brisbane as a whole.

It surrounds us, fills us and we are entirely dependent upon it for our survival, yet water is probably one of the most overlooked sectors within the market.

The ISE Water Index (HHO) has enjoyed an impressive rally this year, while the world remains focused on the rising price of crude oil and the flagging performance of the dollar. The ISE Water Index is composed of companies engaged in water distribution, water filtration, flow technology and other water solutions. The index has tacked on nearly 5% since the start of 2008, easily outpacing the S&P 500 Index’s (SPX) loss of 7.7% during the same time frame.Click here to download "Energy Bull Market: Six Must-Own Stocks."

The ISE Water Index has been buoyed by solid support from its ascending 10- and 20-day moving averages for most of 2008 and is now hovering close to its all-time high of 95.19. In fact, the index has climbed steadily higher since it was created in January 2006, gaining more than 36% along the way.

One company definitely worth watching within the ISE Water Index is Flowserve. The company makes pumps, valves and mechanical seals, and it is the world's largest provider of pumps for the chemical, petroleum and power industries, selling its products and services to more than 10,000 customers around the globe.Special Offer: How high will Potash Saskatchewan (POT) climb? Should you still be a bull on fertilizer stocks--or is the bullish case a bunch of manure? How about gold--is that party over? Click here for daily recommended trades in Bernie Schaeffer's Option Advisor.

Flowserve shares have been in a strong uptrend since late January and have gained roughly 40% since the beginning of 2008, climbing along the support of their ascending 10- and 20-day moving averages. But this is just a small part of the security’s long-term uptrend that started in March 2007. The equity is currently consolidating into support at its 10-week moving average, which it could use as a springboard to launch it higher.

However, investors are quite skeptical of the shares. The Schaeffer’s put/call open interest ratio (SOIR) stands at 1.27, as put open interest easily outweighs call open interest among June and July options. This preference for put options indicates that investors aren’t expecting the shares to rally much higher during the near term. What’s more, this ratio is higher than 89% of all those taken during the past 52 weeks. In other words, short-term speculators have been more pessimistically aligned just 11% of the time during the past year.

Furthermore, Wall Street has yet to jump on this outperforming security. According to Zacks, only four brokerage firms following the firm and not one of these gives it a "buy" rating. Any upgrades and/or fresh coverage from the various brokerage firms could help to give the shares a boost. To take advantage of a rally in the shares, investors should consider the stock’s July 135 call.Special Offer: Profit as stocks go up and go down. Although it can be nerve-racking, you can make money on price declines if you own puts. Which stocks and ETFs are most likely to slip most? Financials? Tech? Fertilizers? Click here for recommended trades with a 30-day free trial of Option Advisor.Another strong security within the HHO is Danaher. The company has a professional instrumentation group that produces environmental and electronic testing technology. It offers product identification equipment and consumables; motion, position, speed, temperature, level instruments and sensing devices; liquid flow and quality measuring devices; aerospace safety devices and defense articles; and electronic and mechanical counting and controlling devices.

Since mid-March, Danaher has trekked higher, creating a series of higher lows. What’s more, the stock has reclaimed the 80-level, which is also home to the security’s rising 10-month moving average. The trend line has carried the stock higher during the past several years along with its 20-month trend line. It appears that the shares are now poised to resume their long-term uptrend.

Much like Flowserve, options players have taken a bearish stance toward Danaher. The put/call open interest ratio for the security stands at 1.03, as put open interest outweighs call open interest. This ratio is also higher than 83% of all those taken during the past 52 weeks. Meanwhile, six of the 17 analysts following DHR rate it a "hold," leaving the door open for potential upgrades. A July 80 call would allow a trader to benefit from a bounce off support at the stock’s long-term support.

Not all is well in water world. Aqua America is a utility holding company that provides water and wastewater services through its operating subsidiaries to about 2.8 million residents in more than a dozen states, including Florida, New Jersey, New York, and Pennsylvania. In addition, Aqua America provides water or wastewater services to Philadelphia and in 23 other counties in Pennsylvania, or about half of the company's total customers. Despite providing these indispensable services, the stock has been in a steep downtrend under its 10- and 20-week moving averages since late September. In fact, during this time frame, the stock has shed more than 28%.

Investors, however, are extremely optimistic about Aqua America’s prospects. The Schaeffer’s put/call open interest ratio for WTR stands at 0.35 and is lower than all but 7% of the readings taken during the past 52 weeks. Should the optimists grow weary of the stock’s downtrend, they could close out their long positions, creating more selling pressure on the shares. There is also ample room for downgrades, as five of the eight analysts following WTR rate it a "buy" or better. Any downgrades for WTR could spell trouble for the shares.

One final concern comes from short sellers. Roughly 15.2 million WTR shares have been sold short, accounting for nearly 12% of the company’s total float. If these short sellers decided to add to their winning positions, it could create a fresh round of selling pressure for the shares. To take advantage of the stock’s steady downtrend, traders should look to the stock’s September 17.50 put.

REDLAND City Council has come close to starting a war of words with the State Government over the introduction of fluoridated and recycled water in South East Queensland.

Division 9 Councillor Karen Williams last week called on the council to ramp up pressure on the Bligh Government over the process used to implement its water policies, but the motion was defeated 6-5 at Wednesday’s general meeting.

The attempt came as the government prepared to begin a fluoridation rollout across the region and backed away from its plan to add recycled water to Brisbane’s Wivenhoe Dam as a permanent water source.

Premier Anna Bligh said purified recycled sewage would now only be added to that dam if combined dam levels fell below 40 per cent. Redland City still draws its supplies from Leslie Harrison Dam at Capalaba and North Stradbroke Island groundwater.

Fluoridated water is scheduled to be introduced in Redland City late next year – contrary to a weekend media report that said our supplies would be fluoridated this month – in a move designed to reduce children’s tooth decay.

Cr Williams urged her colleagues to support a motion whereby the council would contact the State Government immediately on behalf of the community outlining strong objections to the “bulk fluoridation of our water supply without informed consent, nor confirmed majority consensus of our community”.

She said the council should also “strongly object to the addition of recycled water to our potable water supplies without any democratic process being undertaken and acknowledged”.

This was a reference to the government’s decision to abandon a 2007 plebiscite allowing residents to vote on the plan.

Cr Williams said the council should stand up on behalf of its residents in support of community engagement and due process.

But Mayor Melva Hobson opposed the motion, saying she did not want to start interfering in State Government issues and residents who had concerns should contact their state members directly.

Division 2 Councillor Craig Ogilvie, who is a Labor Party member, said the council should not tell the government “how to suck eggs”.

But Division 4 Councillor Peter Dowling, who will be the Liberal National Party’s state election candidate for Redlands, said fluoridated and recycled water should not be “forced” onto residents until the government properly educated the community. The comments stood in contrast to Cr Dowling’s declaration two years ago that recycled water was “the smartest option for the future”.

Cr Hobson told the Bayside Bulletin the council had no mandate for a position on recycled water or fluoridation issues as they had not been raised during the election campaign.

“I don't feel we can speak on behalf of the Redland community on this issue,” she said.

“It's a State Government issue.

“We don't want the State Government to tell us what to do. My goal is to work with the government of the day to achieve the best outcomes for the Redland community.”

In a statement to the Bayside Bulletin, Cr Williams called for an “open and rigorous debate” on the fluoridation and recycled water issues.

“I do not believe there was a level of sufficient debate (at Wednesday's general meeting) that would have occurred in local government where party politics are virtually non existent,” Cr Williams said.

“I am disappointed that other councillors who openly espouse effective community engagement did not support this motion.”

Voting with Cr Williams and Cr Dowling to send a message to the government were Crs Kathy Reimers (Div. , Helen Murray (Div. 10) and Wendy Boglary (Div. 1).

Inquest told Jacqueline Henson died after drinking too much water on LighterLife diet plan

By Kaya Burgess in London

The Australian

December 13, 2008 12:59am

* Mother embarks on water-based diet * Drinks four litres of water in two hours * She collapses, dies from water poisoning

A BRITISH mother of five died after drinking too much water three weeks after she had begun a water-based diet to lose weight, an inquest has heard.

Jacqueline Henson, 40, was determined to slim down from 89kg and was "over the moon" after losing nearly 5.4kg in one week after starting the LighterLife diet plan, Huddersfield Coroners' Court in England was told yesterday.

The LighterLife diet, which has been linked with water poisoning, hair loss and disrupting the menstrual cycle, suggests consuming only 2220 kilojoules a day - a quarter of a woman's recommended daily intake - for a period of 12 weeks, and drinking four litres of water a day.

Ms Henson drank four litres of water in less than two hours on November 14, which caused her brain to swell, The Australian reports.

She collapsed in the bathroom of her home in Huddersfield, West Yorkshire, and was pronounced dead the next day.

Her husband, Brian, 40, said he was devastated, and told the inquest how she had been "over the moon at losing weight". He said: "The more water she drank, the more weight she would lose."

Ms Henson had arrived home at 5pm and had drunk two large bottles of water before settling in front of the television, drinking from a pint glass of water she had poured herself.

Mr Henson said: "At 11pm she stood up and said her stomach was solid. She was walking across the room and was sick.

"At 11.15pm she said she had a headache and went upstairs to the toilet. My 18-year-old daughter, Chantelle, went upstairs and I heard her saying 'Mum, Mum'. I knew something was wrong. Her eyes were closed and she didn't appear to be breathing."

Joanna Neville, of LighterLife, was asked by Coroner Roger Whittaker about the potentially dangerous regime, but she explained that the diet recommended drinking four litres of water over the course of a day in small amounts.

Asked if the company conveyed that message to dieters, Ms Neville said: "We are doing that quite clearly and will continue to do so."

The court was told that on October 18, Ms Henson had visited her GP, who had given her a check-up before allowing her to go on the diet.

Recording a verdict of accidental death, the coroner said: "No one should drink water in the quantity that Mrs Henson did over that short a period. Little, and often."

The National Institute for Clinical Excellence recommends that very low kilojoule-intake diets should be followed for a maximum of 12 weeks, and states that any diet of less than 2500 kilojoules should be used only under medical supervision.

Governments everywhere are attempting to control the water. I live in a small town, over time our town has developed it's own water system, with a local water board. All residents pay for the system, there is a hook-up fee, and then a fee of $60 per year. We currently have 24 hookups on our system, that by the way has never operated at a defecit, last year someone wanted to build in our town and hook up to the water system, the DOH (Department of Health) said that it was ok, but that we as a community would have to meter every home, relinquish control to them, and be charged a metered fee for usage overages, as a community we elected to not allow an additional hook-up, because of the danger and expense of allowing the DOH to regulate our system. How annoying that this community bought and paid for our water system, and the DOH wants us to turn it over to them so that they can charge us for our water. There were a few people on the system that thought government regulation would be a good thing, we quickly talked them out of that just by citing costs. Few are as fortunate in regards to water systems, but at least those of you with semi government systems can and should resist further regulation, as they are just looking for a way to charge you for something you already own, and perhaps charge you so that they may introduce toxic waste into your water system.

The two main environmental news stories of the past year or so have been the twin impending disasters of global warming and water shortages. There is a scientific consensus that global warming is occurring, and many governments (including, belatedly, the Bush Administration) have taken steps to address the problem.

But the more pressing issue is water; people can live with global warming (and have been for some time), but people cannot live without water.

While drinking water is the most obvious need, everything around us takes water to produce, from food to telephones to tires. Not only is agriculture dependent on water [the U.S. Geological Survey estimates it takes about 1,300 gallons of water to grow a hamburger] but so is virtually every industry. Even energy production needs water, in hydroelectric dams and nuclear reactor cooling towers.

Demand soars

The barrage of news reports warn of a dire water shortage, and provide sobering statistics:

The global demand for water has tripled over the last 50 years, while water tables are falling in many of the world's most populated countries, including the United States, China, and India.

Many of the world's great rivers are a fraction of the size they once were, and some have dried up completely.

Earth's lakes are vanishing at an alarming rate; the Aral Sea, for example, is less than a quarter its original size. Nevada's Lake Mead is half its original capacity; a recent study concluded that there is a 50/50 chance that the lake will be gone in less than fifteen years.

It's true that there is cause for alarm, but to understand the problem people need to read behind the headlines to understand one little fact: There is no water shortage.

Our planet is not running out of water, nor is it losing water. There's about 360 quintillion gallons of water on the planet, and it's not going anywhere except in a circle. Earth's hydrologic cycle is a closed system, and the process is as old as time: evaporation, condensation, precipitation, infiltration, and so on. In fact, there is probably more liquid water on Earth than there was just a few decades ago, due in part to global warming and melting polar ice caps.

The problems

No, there is plenty of water. The problem is that the vast majority of Earth's water is contained in the oceans as saltwater, and must be desalinated before it can be used for drinking or farming.

Large-scale desalination can be done, but it is expensive.

But nor is the world running out of freshwater, either. There's plenty of freshwater on our blue globe; it is not raining any less these days than it did millennia ago. As with any other resource, there are of course regional shortages, and they are getting worse. But the real problems are availability and transport; moving the freshwater from where it is plentiful (such as Canada, South America, and Russia) to where it is scarce (such as the Middle East, India, and Africa). Water is heavy and costly to transport, and those who can afford it will always have water.

Water, not global warming, is likely to be the greatest environmental challenge facing the world in the coming decades and centuries.

To find solutions, it's important to understand the problem. Water is never really "wasted." It simply moves from one place to another. If you let your faucet drip all day, that's clean water going back into the system, the water isn't "lost." What is lost is usefulness, money, and energy, because it takes energy to purify and distribute the water.

Water conservation is very important, but not because there is a shortage of water; it is the ultimate renewable resource. As with any resource, the issue is getting it to those who need it.

WHILE the federal Government is spending $3 billion to buy back water licences in the drought-stricken Murray-Darling, farmers in the Queensland portion of the basin are expanding irrigation works in a challenge to Canberra's newly acquired powers.

NSW farmers and water experts say savings from the commonwealth buybacks will be undone by new irrigation works on the Warrego River, a major Murray-Darling tributary in western Queensland.

However, federal Water Minister Penny Wong said she would not intervene to block the works.

The Queensland developers are backed by foreign money in food production plans that defy predictions of a dire outlook for Murray-Darling irrigation.

The irrigation expansion plans loom as a test case for Canberra's plans to manage the Murray-Darling Basin, with the Bligh Government bluntly telling Senator Wong that they will proceed with state support.

While the commonwealth has taken control of the Murray-Darling, state river plans continue to operate until their expiry.

The Warrego River resource operations plan expires in 2014.

Senator Wong said she had accepted advice from Queensland that the new plans were proceeding under legally issued entitlements within caps on water extractions set by state river plans.

The main Warrego irrigation venture, on the Mirage Plains property south of Cunnamulla, would cancel out the water savings from Canberra's $24 million purchase in September of the Toorale cotton property in northern NSW.

Toorale is downstream on the Warrego from Mirage Plains, and was acquired to return to the Murray-Darling its annual allocation of 14 megalitres.

Mirage Plains has an allocation of 23 megalitres.

While irrigation is expanding in Queensland, the Rudd Government is about to spend $350million on acquiring water allocations in the state.

The Government's emissions trading white paper last month predicted average streamflow in the Murray-Darling would drop by 10-25 per cent by 2030, with irrigated agriculture in the basin suffering a 92 per cent decline.

However, the Mirage Plains venture, an amalgamation of six properties on the Warrego, aims to boost food production in the basin.

European investors are understood to have invested $20 million in the project, which is being developed by the partly British-owned company Primary Holdings International.

Primary Holdings business development manager Bryce Graham said there was room for irrigation expansion.

"The Warrego River is one of the more under-allocated watercourses in the Murray-Darling," Mr Graham said. "There's global investor interest as far as food security is concerned, and that's what this project is about."

Clive Wylie, a partner in the venture and owner of poultry business Inglewood Farms, said 500ha presently under irrigation would be expanded to between 3500ha and 4000ha of wheat, oats, beans and other crops.

Mr Wylie has purchased another property on the Warrego, Hortonvale, from the Dunsdan cotton family. He plans to triple the 1500ha under irrigation for organic cereal grains on Hortonvale over the next decade.

Mr Wylie said the focus for both operations was sustainability, with practices such as crop rotation and composting to minimise water use.

He dismissed predictions of a dire outlook for irrigation in the Murray-Darling.

"There is a lot of emotional debate surrounding this issue which is based on little fact. The jury is still out on climate change. On the Warrego, we can continue to irrigate sustainably with no damage to the environment."

Darling River Action Group secretary Brian Stevens said NSW farmers downstream were distressed at the Warrego River developments.

"There's not much point in buying places like Toorale when they just go ahead and put in bigger irrigation works upstream," Mr Stevens said.

"We can only take the water when the Warrego is in full flow and a lot of that floods and soaks into the ground," Mr Sweeney said. "These blokes down south like to have a whinge, but they would be doing exactly the same thing if they were in our position."

University of NSW wetlands expert Richard Kingsford said the Warrego developments would inevitably reduce flows downstream.

"The fundamental issue for the commonwealth's management of the Murray-Darling is that many of the state river plans are not ecologically sustainable," Professor Kingsford said. "We'll be going backwards for another five years on the Warrego before the Commonwealth has any opportunity to fix the problems."

Queensland Water Minister Craig Wallace said the developments would proceed under existing allocations, with no new licences being issued.

"Queensland is the only state which prohibits water extraction before environmental flows have taken place," he said. "This means 70 per cent of water in the Queensland part of the Murray-Darling system flows into NSW."

Senator Wong said she would announce soon allocations to be acquired under the $350 million buyback Queensland plan.

AUTHORITIES have applauded efforts to reduce water usage with Melburnians achieving tight water-saving targets as the city struggles with diminishing supplies.

By today, Melbourne's reservoirs collectively held just 30.2 per cent of water supplies.

But recent rainfall and cooler weather had helped to keep daily usage per person to 155 litres or less, with over-watering of gardens and plants a key factor in previous high water consumption figures, Yarra Valley Water said.

After reaching up to 241 litres per person at the height of heatwave conditions in January and February, usage had steadily dropped, with residents using 181 litres per person per day last week before a further fall to just 149 litres per person this week.

"It shows that we are all capable of using less water and using it more efficiently," Tony Kelly, managing director of Yarra Valley Water and Target155 campaign spokesman, said.

"While this week's cooler weather and rainfall supported our efforts, households are now aware that if it rains, they don't need to water their gardens as well."

WATER flowing into a river that feeds Sydney's drinking water supply is laced with metals and poisons including arsenic, copper and boron, a university researcher says.

The poisons have been seeping from a coal-fired power station near Lithgow, in the Blue Mountains.

The Department of Environment and Climate Change says it knows about the discharge from Wallerawang power station, and is reviewing research by the University of Western Sydney which indicates "a large and unnatural increase above natural background arsenic levels in the upper Cox River catchment''.

The university's Ian Wright said the arsenic was diluted downstream and is not thought to pose a human health risk, Fairfax Media reports.

Copper was measured close to the power station at between 30 and 50 times natural levels, and boron levels were 25 times higher than upstream.

Dr Wright's research will be used in a case to be put before the Land and Environment Court, which will argue Delta Electricity is polluting the Cox River and should be made to stop.

As calls for his impeachment grow louder, coupled with possible war crimes trials to begin next year, President George W. Bush may be thinking that South America would make a fine place to retire.

At least two sources now report that Bush has purchased an isolated 100,000 acre ranch in Acuifero Guarani, Paraguay - a favored escape route for convicted Nazi war criminals following WWII.

Prensa Latina reports:

An Argentine official regarded the intention of the George W. Bush family to settle on the Acuifero Guarani (Paraguay) as surprising, besides being a bad signal for the governments of the region. Luis D Elia, undersecretary for the Social Habitat in the Argentine Federal Planning Ministry, issued a memo partially reproduced by digital INFOBAE.com, in which he spoke of the purchase by Bush of a 98,842-acre farm in northern Paraguay, between Brazil and Bolivia.

Another rumored land deal involves the the U.S. military and Paraguay.

Five hundred U.S. troops arrived in Paraguay with planes, weapons, and ammunition in July 2005, shortly after the Paraguayan Senate granted U.S. troops immunity from national and International Criminal Court (ICC) jurisdiction. Neighboring countries and human rights organizations are concerned that the massive air base at Mariscal Estigarribia, Paraguay is potential real estate for the U.S. military.

The timing of the U.S. military operation into Paraguay and the Bush family’s land acquisition in Paraguay cannot be an accident.

Also, Jenna Bush’s recent 10 day visit to Paraguay may have less to do with her work for UNICEF (as reported) and more to do with finalizing the land purchase for her family.

The UK Guardian reports:

Rumours of Mr Bush’s supposed forays into South American real estate surfaced during a recent 10-day visit to the country by his daughter Jenna Bush. Little is known about her trip to Paraguay, although officially she travelled with the UN children’s agency Unicef to visit social projects. Photographers from the Paraguayan newspaper ABC Color tracked her down to one restaurant in Paraguay’s capital Asunción, where she was seen flanked by 10 security guards, and was also reported to have met Paraguay’s president, Nicanor Duarte, and the US ambassador to Paraguay, James Cason. Reports in sections of the Paraguayan media suggested she was sent on a family “mission” to tie up the land purchase in the “chaco”.

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And the King shall answer and say unto them, Verily I say unto you, Inasmuch as ye have done it unto one of the least of these my brethren, ye have done it unto me.Matthew 25:40

The current internet chatter distracting our brave and freedom loving American citizens from action to return our stolen Constitutional rights is the fact that Herr Bush has currently purchased 99,000 acres in Paraguay. Unfortunately, even most of those that know some of the truths regarding our government's abuses of power believe posting on the internet is activism. It seems there is no real action until our citizens have conc rns about their immediate comforts. This purchase by Heir Bush shows that American comforts are in for a big surprise.

Most economists will tell you oil is the key to great financial wealth. A few others will tell you that gold is the only commodity one needs to purchase. Herr Bush knows that very shortly there is only one real commodity that will soar in price and has proven it with his Paraguay purchase. Herr Bush's ranch sits on top of the Guarani Aquifer System. The Guarani Aquifer system is the largest fresh water system in South America. It may be the largest safe aquifer in the world - the worlds largest - the Ogallala aquifer of the Great Plains is currently being drained.

Future water supply must come from an underground under developed, smaller population and non nuclear nation. Surface water is being contaminated worldwide. Underground water is being contaminated worldwide. Neither of the previously cited links mentions the most hazardous water contamination. All of the nuclear nations have tremendous amounts of radioactive water in storage some of it since the mid 1950s. Just one site's leaking tanks are noted inHanford. There are hundreds more of these known sites in the US and thousands more worldwide. One site pumped 4 billion gallons of radioactive waste into the ground and raised the groundwater level by 20 to 30 feet. Several years ago there were at least 2 trillion gallons of contaminated ground water in the US. US abandons most radioactive waste disposal and leaves nuclear waste in clandestine limbo. Uranium mining is contaminating even more areas.

Global warming and rising oceans are now accepted facts that can no longer be concealed. In 2005 and 2006, glacial and polar ice has been melting at a speed approximately three times faster than anticipated. Predictions of a complete melt of the arctic ice cap with a rise in the oceans of 20 feet have accelerated and are now estimated by 2060. These estimates do not take into account the acceleration of the warming process that is taking place. Historical references show that based on these rising temperatures the oceans rising levels will take place faster than anticipated by theory. A twenty foot rise in ocean levels is essentially unstoppable. Time will only tell if we can stop the antarctic complete loss of ice that will bring about a rise in the oceans of 213 feet. This rise in sea level will contaminate many low lying underground water reservoirs with saline.

Herr Bush is going to make another killing, financially and literally. It's easy to make money when you know and control all the national security secrets. Almost all of the industrialized and nuclear nations are already buying bottled water for safe consumption. Water is not far from becoming liquid gold. You can't survive on oil or gold.

The people of the world have done nothing for decades except for blind obedience in ignorance of the facts. We deserve what we get. Unfortunately, and as usual, our children will suffer the worst devastation. Maybe they will be the generation that cares and acts on government's abuses for a return rights and information to The People.

DrEd

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And the King shall answer and say unto them, Verily I say unto you, Inasmuch as ye have done it unto one of the least of these my brethren, ye have done it unto me.Matthew 25:40